Empirical Study Of China's OFDI's Contribution To The Economic Growth Of Bimstec Countries

In the context of SAARC's marginalization,the importance of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation(BIMSTEC)is increasing,but the academic community's research on BIMSTEC is still limited.Research on the relationship between China and BIMSTEC needs to be strengthened.With China's economic development and the advancement of the “Belt and Road”initiative,China's Oversea Foreign Direct Investment(OFDI)has continued to grow and its investment influence in relevant countries has also increased.The scale of China's OFDI to BIMSTEC countries continues to expand,and has formed close investment relations with BIMSTEC countries.This paper intends to use empirical method to study whether the inflow of Chinese OFDI promotes the economic growth of BIMSTEC member countries and the specific transmission mechanism,which provides data support for accurate understanding and further improving the relationship between China and BIMSTEC countries.This paper,based on the theory of FDI and economic growth,adopts the method of combining theory with empirical analysis to analyze the OFDI stock of China and the economic growth of BIMSTEC countries.Through summarizing the literature,we can find that most of the existing research on BIMSTEC countries adopts qualitative methods.This paper uses the combination of quantitative and qualitative methods to study the impact of Chinese OFDI on the economic growth of BIMSTEC countries on the basis of economic growth theory,and further explains the OFDI of China on the economic growth of host countries from three aspects: capital effect,employment effect and technology spillover effect.Secondly,the economic situation of BIMSTEC member countries,the attraction of foreign capital and China's investment in BIMSTEC six countries are analyzed.Then through the establishment of panel data model to analyze the impact of Chinese OFDI on the economic growth of BIMSTEC countries,and from the capital,employment and technological progress of the three paths to analyze the economic growth effect of Chinese OFDI on BIMSETC countries.The empirical results answer the three questions raised by the research background.1,Chinese OFDI have a significant positive effect on the economic growth of BIMSTEC countries,prove that Chinese OFDI is an important factor affecting the economic development of BIMSTEC countries,and prove that Chinese investment is an important factor affecting the economic development of BIMSTEC countries.2.every 1 per cent change in China's direct investment in BIMSTEC countries would result in a 0.03 per cent change in its economy in the same direction,other countries OFDI also play a significant role in promoting economic growth in BIMSTEC countries by attracting foreign investment.3.BIMSTEC countries can absorb the technology spillover effect of Chinese OFDI through capital effect and human capital,which can promote the economic growth of BIMSTEC countries,while the OFDI of other countries promote the economic growth of BIMSTEC countries through capital effect,employment effect and technology spillover effect.Based on the conclusion of this study,we also put forward some targeted policy recommendations for China's FDI in BIMSTEC countries.