The Impact Of Host Country Digital Infrastructure On OFDI In Chinese Enterprises

According to the report of 19 th National Congress of the CPC,it is proved that Chinese economic structure is going to experience a great change.While,the outbreak of pandemic in2020 has brought unprecedented and unpredictable changes in international economic and trade cooperation and competition,and it is reshaping the global system and rules.In order to adapt to the change properly,General Secretary Xi Jinping put forwards that it is urge to form the purpose of domestic circulation as main body,the new pattern of domestic and foreign double circulation supporting each other.As an important measures for participating in the global economy for China,the overall OFDI of China remains active and positive.According to the 2020 World Investment Report,China’s OFDI ranked top one in the world for the first time.For that,some scholars have done some research about the factors that can influence China’s OFDI from the two dimensions of home country and host country,those factors involve in market size,resource endowment,strategic asset,human capital and so on.Others decompose OFDI into intensive and extensive margin to analyze the effect of different factors on the binary margin of OFDI.Literature review shows that scholars have paid little attention to digital economy from either a univariate perspective or a binary perspective.With the rapid development of digital economy,country’s digital infrastructure will further enrich location choice theory.The structure of this thesis is to study the effect of digital infrastructure of host country on OFDI binary margin of China by combining theory and demonstration.At the theoretical level,the extended gravity model and mechanism test of the influence of host country digital infrastructure on OFDI are constructed.In the benchmark regression part.Firstly,PCA was used to measure the digital infrastructure,which regarded as the core explanatory variable,then we plan to use the random effect model as the part of baseline.Secondly,using robustness test,heterogeneity analysis,endogeneity problem treatment,empirical results show that the conclusion of this thesis is robust.Finally,from the dual perspective of information cost and economies of scale,this thesis analyzes the marginal of the growth of OFDI of host country’s digital infrastructure.This article research conclusion as followed:(1)The level of digital infrastructure construction in host countries are totally different,but it exits a clear correlation with the economic development.The result shows that the host country digital infrastructure has positive impact on our country enterprise’s OFDI,but the intensive margin more significantly.(2)In the robustness test,the results of the binary margin did not change no matter whether the tax avoidance countries or regions were excluded,or the core explanatory variables were replaced,this indirectly shows that our conclusion is robust in some extent.In the treatment of the endogeneity,Heckman two-step method and instrumental variable method are used,and it is confirmed that the sample of extensive margin does have the problem of sample selection bias,and after solving the endogenous problem,it is found that the random effect model overestimates the empirical results.(3)In heterogeneity analysis.In the different ownership,the non-state-owned enterprises significant most.In the different industry analysis,the communications infrastructure manufacturing industry tends to invest diversified,while the wholesale and retail industry tends to invest path dependence.In terms of policy orientation and economic development,the results pose heterogeneity.(4)In the mechanism test,the digital infrastructure of host country promotes the growth of OFDI along the extensive margin by regulating the institutional and cultural distance.The business environment restrained the host country digital infrastructure on the OFDI of Chinese enterprises along the expansion margin growth.In the analysis of intensive marginal mechanism,the result is not significant.Given the huge differences between the host countries and home country from the economic development,we divide the sample into two groups according to whether "One Generation One Road" or not,the result proved that the hypothesis 2 is true.