Analysis Of The Impact Of Economic Distance On Outward Foreign Direct Investment Of Typical Countries Along "the Belt And Road" Initiative

China’s Outward Foreign Direct Investment(hereinafter referred to as "OFDI")has achieved remarkable results after implementing the "Going Global" strategy.Among them,since March 2015,the "Vision and Action for Promoting the Joint Development of the Silk Road Economic Belt and the 21 st Century Maritime Silk Road" was jointly issued by the three ministries(ie,the National Development and Reform Commission,the Ministry of Foreign Affairs and the Ministry of Commerce)The scale of direct investment in countries along the “Belt and Road”(hereinafter referred to as countries along the route)is increasing.As the initiative continues to advance,China’s direct investment cooperation with the countries along the route is developing in depth.In analyzing the factors affecting OFDI,the differences in economic development between the home country and the host country have gradually become an issue that is constantly being explored by the academic community.And most scholars believe that economic distance significantly affects the home country OFDI in the host country.Therefore,from the perspective of economic distance,analyzing China’s direct investment in typical countries along the route has significant research significance and can provide theoretical support for the long-term development of OFDI in typical countries along the route.This article first summarizes the domestic and foreign related literature on foreign direct investment and economic distance in detail,defines the concepts of economic distance and foreign direct investment,and analyzes the factors that affect the home country OFDI of the host country in detail,as a theoretical discussion of this article.In the follow-up content of this study,considering the completeness and timeliness of the research time span,the data of China’s direct investment panel from 45 typical countries along the line from 2004 to 2018 is used.The economic distance is divided into five dimensions: demand preference distance,labor price distance,relative price distance,infrastructure distance,and financial development level distance.Combined with the seven control variables of the host country’s own characteristics set by this study,the use of gravity The model empirically analyzes the impact of economic distance on China ’s direct investment in typical countries along the “Belt and Road”,and uses the Diff-GMM estimation method to perform robust tests.Subsequently,this paper uses a time-varying stochastic frontier gravity model to distinguish between investment inefficiencies and overcomes the shortcomings of traditional gravity models in measuring investment efficiency.From the perspective of economic distance,China quantitatively measures the typical 45 countries along the line.The analysis of the investment efficiency value of China from 2004 to 2018 from the overall and individual changes in investment efficiency in typical countries along the route.The results show that the economic distance in the five dimensions has a negative relationship with China’s direct investment scale in typical countries along the route.In addition,the technological level of the host country,the bilateral exchange rate between the host country and the home country,and the level of government governance of the host country significantly positively affect China’s direct investment in a typical 45 countries along the route.The host country’s resource endowment and host country’s tax burden have no significant impact on China’s direct investment in the typical 45 countries along the route.Using a time-varying stochastic frontier gravity model analysis,it is concluded that from 2004 to 2018,the efficiency of China’s direct investment showed a steady upward trend in typical countries along the route.The average direct investment efficiency value increased from around 0.00 in 2004 to 0.20 in 2018.So far,the countries along the “Belt and Road” have become an indispensable part of China’s foreign direct investment in the new era.However,China’s direct investment scale and direct investment efficiency value in the typical 45 countries along the route are still low,and there is still very much room for improvement.And in the typical countries along the route,China’s direct investment scale and direct investment efficiency value show obvious regional differences.Therefore,the layout of China’s direct investment in typical countries along the route should be based on the principle of "from near to far".In terms of investment choices for the host country,direct investment should be considered first in countries with a small economic distance from our country,taking into account the specific factors of the host country,which are different from country to country,and the optimal choice.