The Impacts Of Digital Economy Development Level Distance Between China And Host Countries On China’s Outward Foreign Direct Investment

In recent years,with the rapid development of digital economy,the digital economy development level of host country has become a non-negligible decision-making factor.This paper selects 98 countries worldwide and establishes panel data to discuss whether the digital economy development level distance between the host country and China impact on Chinese outward foreign direct investment.According to the definition of digital economy,Global Competitiveness Report and Global Information Technology Report both issued by World Economic Forum,this paper select 3 primary indicators with 12 secondary indicators to build a comprehensive evaluation index system to measure the national digital economy development level,with principal component analysis method to qualify.The result shows that the digital economy development level of each country is different.In general,the digital economy development levels of African countries are relatively lower,while those in European and American countries are relatively higher,but all of them show a positive trend.The distance of digital economy development level between countries makes research and exchange in the field of digital economy among countries become possible.Based on the index calculated before,this paper selects 98 countries worldwide with data from 2010-2019 using an extended gravity model to discuss whether the digital economy development level distance between the host country and China impact on Chinese outward foreign direct investment.The empirical result shows that Chinese OFDI is affected by the digital economy development level distance between the host country and China.Chinese enterprises are more likely to invest in countries with a slightly higher or much lower level of digital economy development level to China rather than to countries with a much higher or slightly lower level.Then this paper divides the 98 countries into three groups to see the impact.Finally,this paper uses the mediation effect to test the mechanism.The result shows that the digital economy development level distance between the host country and China affects Chinese OFDI through influencing cost and institutional quality.According to the research results of this paper,Chinese enterprises should see the difference of digital economy development level between countries to make correct invest decision and Chinese government should promote bilateral and multilateral corporation with other countries in the field of digital economy to create a good digital investment environment.