The Influence Of Institutional Quality Of The Host Country On High-quality Development Of "Belt And Road" Investment In Textile Industry

With the deepening of the Belt and Road Initiative,the scale of Outward Foreign Direct Investment(OFDI)in China’s textile industry has increased,the pace of investment has been gradually steady,and the structure of foreign investment has been further optimized.The OFDI of China’s textile industry is not only a simple expansion of scale,but also pays more attention to the quality of investment.In the context of the high-quality development of OFDI and the Belt and Road,it is of great significance to study the textile industry’s contribution to the high-quality development of the Belt and Road investment.Countries along the Belt and Road have become the main regions for OFDI in the textile industry due to factors such as low labor cost,preferential tax treatment,superior geographical location and rapid economic development.However,due to the great differences in political,economic,legal and other systems among countries along the Belt and Road,the institutional quality of the host country will affect the operating cost and investment risk of China’s textile industry in the host country,resulting in the problem of poor investment quality.Therefore,from the perspective of the institutional quality of countries along the Belt and Road,this paper studies its impact on the high-quality development of OFDI in the textile industry through theoretical analysis and empirical analysis,so as to provide a basis for textile enterprises to make investment decisions.Firstly,from the theoretical part,this paper studies the definition and measurement of institutional quality and high quality of foreign investment,and reviews the research on the influence of institutional quality of the host country on investment quality,as well as related research on OFDI of textile industry.Then,through theoretical analysis,this paper studies the influence mechanism of the institutional quality of host countries on the quality of China’s OFDI,and analyzes the investment in the textile industry along the Belt and Road and the current situation of the institutional quality of the countries along the Belt and Road.Secondly,this paper studies the effect of "Belt and Road" policy on OFDI of China’s textile industry from an empirical perspective,and then uses principal component analysis method to measure the comprehensive institutional quality,political and legal system quality,and economic system quality of the host country.The stochastic frontier model is used to measure the investment efficiency and investment potential,and the investment quality index is constructed according to the investment scale,investment efficiency and investment potential.Based on the investment data of the textile industry in the "Belt and Road" countries from 2015 to 2020,the fixed effect model is used for empirical analysis.This paper firstly studies the influence of the institutional quality of the host country on the investment scale,efficiency and potential of the Belt and Road Initiative in the textile industry,and then studies the influence of the institutional quality of the host country on the investment quality of the Belt and Road Initiative in the textile industry.It is found that high quality of comprehensive system,political and legal system and economic system is conducive to the improvement of OFDI quality in China’s textile industry.The effect of specific institutional quality shows heterogeneity: in the dimension of political institution,OFDI of textile industry flows into regions with low political democracy;In the dimension of legal system,the more perfect the host country’s legal system is,the more conducive it is to attract OFDI in the textile industry.In the dimension of economic system,trade freedom has an alternative characteristic to the investment efficiency.Finally,according to the empirical results,this paper puts forward some suggestions: "Belt and Road" policy has promoted the OFDI of China’s textile industry.In order to achieve highquality development of investment,attention should be paid to the joint improvement of investment scale and investment efficiency.In the process of OFDI,textile enterprises need to investigate the institutional quality of host countries to reduce investment risks.China and countries along the Belt and Road need to build a new situation of win-win cooperation in foreign direct investment and other fields,establish an open and free environment for foreign investment,introduce more incentives and preferential policies for multinational enterprises,and establish a comprehensive risk assessment system to provide institutional risk warning for their investment along the Belt and Road.