A Study On The Impact Of Investment Facilitation Of The Countries Along The Belt And Road On China’ Outward Foreign Direct Investment In Services

The introduction of the Belt and Road Initiative in 2013 has provided a new opportunity for economic and trade cooperation between China and countries along the Belt and Road,and bilateral economic and trade cooperation has continued to deepen and become increasingly sophisticated.Among them,investment in the service sector in countries along the Belt and Road has been on the rise,and the countries along the Belt and Road have become one of the main destinations for Chinese outbound direct investment in the service sector.However,most of the countries along the Belt and Road are developing countries,and the investment environment is relatively incomplete and the level of investment facilitation is low,which hinders the further expansion of Chinese service industry investment in the countries along the Belt and Road and is not conducive to the development of investment cooperation.In fact,investment facilitation has gradually become an important topic of close attention in international economic and trade activities and a hot spot for academic research at home and abroad.So,what is the level of investment facilitation in the countries along the Belt and Road? Does the improvement in the level of facilitation in the countries along the Belt and Road promote outward foreign direct investment in China’s service sector and how can it do so? In the context of deepening economic and trade cooperation between China and the countries along the Belt and Road,research on these issues is of great significance,not only to complement the research on investment facilitation in the construction of the Belt and Road,but also to provide reference value for the formulation and improvement of China’s investment policies to the countries along the Belt and Road.It is also an important reference for the formulation and improvement of China’s investment policies in countries along the Belt and Road,and an important guide for Chinese service enterprises investment in countries along the Belt and Road.By constructing a system of investment facilitation indicators for countries along the Belt and Road,this paper focuses on the impact of investment facilitation in countries along the Belt and Road on China’s outward foreign direct investment in service industries.Firstly,the current situation of Chinese service industry investment in the countries along the Belt and Road is analysed from three perspectives such as investment scale,investment country and investment industry.Secondly,this paper constructs a system of investment facilitation indicators for countries along the Belt and Road,with 5 primary indicators and 24 secondary indicators selected to measure the level of investment facilitation in countries along the Belt and Road using principal component analysis.Then,based on a review and analysis of OFDI theory and related research literature,the mechanisms through which host country investment facilitation affects foreign investment are analysed and summarised from three perspectives such as improving the investment environment,saving costs and expenses,and increasing efficiency and effectiveness,respectively.The study also empirically analyses the impact of investment facilitation along the Belt and Road from 40 countries to Chinese service sector OFDI.The results of the study show that the level of investment facilitation in the countries along the Belt and Road significantly contributes to Chinese services OFDI,but there are differences in the marginal contribution of the primary indicators of investment facilitation to Chinese services OFDI.Further,robustness tests were conducted using the replacement model and core explanatory variables,and the findings remained significant.Heterogeneity tests show that investment facilitation in East Asia and countries with low market potential have a more significant impact on Chinese outward FDI in services.Based on the finding that investment facilitation in countries along the Belt and Road has a positive effect on Chinese direct investment in the service sector,this paper proposes corresponding policy recommendations to promote the healthy and rapid development of Chinese service sector investment in countries along the Belt and Road.China should strengthen bilateral labour cooperation,build a multi-channel and dynamic financial services system,promote bilateral infrastructure connectivity and strengthen the protection of intellectual property rights,while Chinese enterprises should pay attention to the assessment of the market environment of host countries before investing.