The Impact Of The Quality Of Governments Along The Belt And Road On The Efficiency Of Chinese Outward Direct Investment

With the "Belt and Road" region becoming a focus of investment in 2017,Chinese companies invested nearly 3,000 overseas companies in countries along the route,involving a total of 17 industries,12.5%of foreign direct investment flows with an increase of 3%over the previous year.Among them,Singapore,Kazakhstan,Malaysia,Russia,Laos,Thailand,Vietnam,Pakistan,and the United Arab Emirates are the main destinations for investment.However,the political risks of the countries along the route are greater,and the instability of the domestic government and the turbulence of the geopolitical situation have brought greater uncertainty to the investment.It is difficult to earn 28.5% of the funds invested,as punctual international data shows,from 2005 to 2017,the risk cases of Chinese companies failing or being blocked from investing in the countries along the "Belt and Road" are mostly due to the inadequate performance of the host country’s government funds.As a result,it was difficult for Chinese companies to recover funds,which caused more than 50 risk cases,accounting for 26.7% of the total amount of risk funds involved was approximately USD 56.52 billion,accounting for 24.0% of the total,and the average amount involved in each case was USD 1.71 billion.Therefore,with the increase in the total investment,attention should be paid to whether the investment efficiency has improved.Against this background,this article focuses on the impact of the quality of governments along the "Belt and Road" countries on the efficiency of China’s foreign direct investment.First,based on the key investment country markets mentioned in the "Investment Promotion Report under the "Belt and Road" Initiative issued by the Ministry of Commerce,this article selects 36 countries’ FDI stock indicators and 4,212 from 2009 to 2017.Sample data use stochastic frontier analysis(SFA)to measure investment efficiency.The measurement results show that the average investment efficiency of China in these countries is about 0.6,the investment efficiency in ASEAN and Central Asia is higher,the Central and Eastern Europe is lower,and there are fewer high-efficiency countries.Therefore,China’s investment in the countries along the "Belt and Road" There is still much room for improvement in efficiency.Secondly,this article conducts an empirical analysis of the influencing factors of China’s investment efficiency along the "Belt and Road" countries.The results show that the level of economic development,natural resource endowment,geographical distance and foreign trade dependence are positively related to China’s investment flows,while inflation Rate and labor force structure did not pass the significance test.This shows that Chinese enterprises tend to invest in countries with large market sizes,high economic potential,strong consumer purchasing power,relatively low transportation costs,rich natural resources,and high openness.For the two indicators that failed the significance test,the author believes that it is because Chinese enterprises’ overseas investment is a long-term behavior rather than speculation,and the investment in the host country is mainly for the purpose of obtaining new energy and resource supplies and opening new markets,so inflation Rate is not a key indicator that affects corporate investment.In addition,the investment industry today is not concentrated in labor-intensive industries.From the perspective of investment motivation,companies are not only seeking low-cost but high-efficiency,and the size of the labor force does not represent the quality of the labor force.The main indicators affecting investment.Government quality is the main factor affecting technical efficiency.Among the six indicators of government quality measurement,the right to speak and accountability,government efficiency and foreign investment efficiency are positively correlated,political stability and management quality are negatively correlated,and the degree of rule of law and Corruption control failed the significance test.This shows that the more perfect the country’s democratic system,the formulation of policies reflects people’s livelihood,the independent administration under social pressure,and the effective implementation of policies are conducive to the improvement of investment efficiency.The government stability and management quality coefficient are negative,which is inconsistent with the author’s expectations.This article believes that countries with poor political stability have maintained friendly economic and trade cooperation with China for a long time,such as ASEAN and the CIS.Investment efficiency has a greater negative impact.The value of the management quality coefficient is negative,which is a certain deviation from the author’s expectations.This article believes that government supervision of the market is an effective way to ensure market norms,but there is still a gap between the developed countries and the developed countries in terms of regulatory concepts,and the degree of supervision is too high.It may restrict the entry of Chinese enterprises.The host government may participate in the daily operations of the enterprise in the local area.At the same time,it also increases the risk that the local business income of the enterprise in the host country will be confiscated by the government for free,which will further increase the investment in the area.Big uncertainty.Finally,on the basis of summarizing the full text,this article puts forward suggestions from the choice of target market,industry choice,policy support,and enterprise risk prevention.It is believed that enterprises should not only focus on their economic performance before selecting a target market,should understand the host country’s institutional environment from multiple channels,formulate a response plan for potential risks in advance,and comply with relevant laws and regulations to ensure the legality of business operations.In terms of industry selection,companies should enhance their innovation capabilities,strengthen technical cooperation and exchanges with host countries,and focus on the development of technology-intensive industries.For energy-rich countries,development cooperation should be based on the conditions of each industry in the country to avoid the industry being affected by the international crude oil market.The impact of fluctuations is greater.At the same time,our government should actively improve and actively modify and sign bilateral investament agreements and free trade agreements with countries along the "Belt and Road" to promote the flow of funds and commodities while protecting the rights and interests of Chinese enterprises in accordance with the law overseas.