The Research On The Impact Of Bilateral Political Relations And Institutional Distance On China’s OFDI To "Belt And Road" Countries

With the continuous advancement of globalization and China’s "One Belt and One Road" initiative in 2013,China’s OFDI is growing rapidly and its influence in the global investment arena is also expanding,making it extremely important to study the factors influencing Chinese OFDI.For the investment activities of home country investors,the institutional environment of the host country and the political relationship between the home country and the host country are factors to be considered.Therefore,this paper wants to explore whether Chinese OFDI in countries along the Belt and Road is affected by bilateral political relationship and institutional distance in the context of the Belt and Road Initiative,and whether bilateral political relationship has a moderating effect on institutional distance.Based on the systematic review of related literature,this paper theoretically analyzes theoretically analyzes the influence mechanism and action mechanism of bilateral political relationship and institutional distance on OFDI,and takes bilateral political relationship as a moderating variable to study its moderating effect on the relationship between institutional distance and OFDI.Then three research hypotheses are proposed: bilateral political relations are positively related to Chinese OFDI,institutional distance is negatively related to Chinese OFDI,and bilateral political relations have a moderating effect on the institutional distance between the two countries.The current situation of China’s OFDI,bilateral political relations and institutional distance to countries along the Belt and Road is analyzed using data on China’s OFDI flows and stocks,bilateral political relations and institutional distance between China and countries along the Belt and Road.In addition,an empirical study is conducted on the influence of bilateral political relations and institutional distance between China and countries along the belt and Road on China’s OFDI to test the research hypothesis.And heterogeneity analysis was performed on this basis.The results show that institutional distance has a negative relationship with Chinese OFDI,bilateral political relations have a positive relationship with OFDI,and bilateral political relations have a moderating effect on the relationship between institutional distance and OFDI.That is,institutional distance can hinder Chinese OFDI,good bilateral political relations can promote Chinese OFDI,and friendly political relations can moderate the negative effects of institutional distance.And according to further research results,three factors,namely,Maritime Silk Road versus Land Silk Road,Proximity to China versus Non-Proximity to China,and Before and After the Belt and Road Initiative,have an impact on bilateral political relations,institutional distance,and their interaction with Chinese OFDI,with different effects.Based on the research results,this paper proposes countermeasures in several aspects,including actively promoting the signing and improvement of investment agreements with countries along the Belt and Road,focusing on diplomatic activities,making full use of high-level visits,attaching importance to partnerships,promoting cultural exchanges,eliminating the negative effects caused by cultural differences,strengthening risk prevention,and making full use of state-owned enterprises to drive investment.