An Empirical Study Of Economic Distance Affect China’s Outward Foreign Direct Investment

Since the China has actively promoted the “going out“ strategy,China’s outward foreign direct investment(OFDI)has made remarkable achievements,which has aroused the interest of scholars in studying China’s outward foreign direct investment.The research focus on China’s outward foreign direct investment seeking motivation,location selection,spillover effect and influence factors,etc.These research perspective of the economic factors become the protagonist of the study.In particular,the economic development of the home country and the host country has affected the research of China’s outward foreign direct investment as the subject of continuous discussion.Therefore,this study draws on the gravitational model of transnational investment,and discusses the impact of economic distance on our country’s OFDI from the perspective of economic distance,and provides some theoretical basis and empirical reference for the sustainable development of China’s foreign direct investment.This study makes a clear definition of the economic distance and the concept of foreign direct investment,and combs the relevant literature of economic factors and foreign direct investment in detail as the theoretical starting point of this study.In order to study the influence of economic distance on China’s foreign direct investment,this study attempts to draw lessons from the gravitational model and construct the economic model of China’s foreign direct investment.On this basis,this study analyzes the economic distance and the characteristics of China’s foreign direct investment,focusing on the characteristics of China’s foreign direct investment and economic distance,and intuitively explore the economic distance and the relationship between China’s foreign direct investment,confirmed the economic distance and China Foreign direct investment is negative.In order to get more robust experience,this study uses of the data of foreign direct investment of 123 countries or regions in China from 2003 to 2015,and uses the system GMM estimation method to study the economic distance impact on direct investment.The results show that the economic distance has a significant negative impact on China’s foreign direct investment.It is that the increase of economic distance will reduce the size of China’s investment in the host country.Then,distinguishing the different economic distance,we found that the positive economic distance significantly positive impact on China outward foreign direct investment.In the forward economic distance,China’s foreign direct investment with economic distance to play a competitive advantage into the economy is relatively small host country.The negative economic distance significantly negative impact on China’s foreign direct investment.In the negative economic distance,China’s outward direct investment into the relatively developed economy of the host country,access to foreign advanced science and technology,brand,patent,management experience and other intangible assets,enhance the future competitive position.In addition,the impact of the economic distance on China’s foreign direct investment is also studied from the grouping of the host country,the time grouping,the “ country along the way “ and the different investment motivations.