Research On The Impact Of Business Environment Of Countries Along The "The Belt And Road" On China’s OFDI

The business environment is the soil for the survival and development of enterprises in various countries,and improving the business environment is the institutional guarantee for stimulating market vitality and enhancing endogenous development momentum.Since the "the Belt and Road" initiative was put forward,China has become increasingly close to countries along the Belt and Road,and the scale of China’s direct investment in them is growing.However,due to the fact that most of the countries along the route are developing countries and transition countries,with incomplete political and legal systems,some countries along the route face problems such as cumbersome enterprise start-up processes,financing difficulties,insufficient investor protection,and poor contract execution.Therefore,this paper takes the countries along the "the Belt and Road" as the research object to explore the impact of their business environment on China’s foreign direct investment(OFDI),with a view to providing reference for China’s OFDI investment decisions.This article first reviews relevant research literature and theoretically elaborates on the relevant theories of international direct investment and business environment,as well as the relevant mechanisms of the impact of the host country’s business environment on OFDI.Secondly,this paper calculates the comprehensive level of business environment of countries along the "the Belt and Road" according to the Business Environment Report issued by the World Bank,and makes descriptive statistics on the business environment of countries along the "Belt and Road" and the current situation of China’s OFDI.Once again,this article empirically examines the impact of the comprehensive level of business environment in countries along the Belt and Road on China’s OFDI from 2006 to 2019,and conducts empirical analysis based on relevant sub indicators.The countries along the Belt and Road are further divided into developing countries,transition countries,and developed countries to further study the differences in the impact of business environment in countries along the Belt and Road on China’s OFDI in different types of countries.The research results show that:(1)The overall business environment level of developed countries along the route is much better than that of developing countries,and the business environment level of transition countries along the route is improving rapidly,and is increasingly close to that of developed countries along the route.(2)The comprehensive level of business environment in developed countries along the route does not have a significant impact on China’s OFDI,while the comprehensive level of business environment in developing countries and transition countries along the route significantly promotes China’s OFDI.(3)The scores of the nine sub indicators of the business environment in countries along the route have a significant difference in their impact on China’s OFDI.(4)The market size and labor situation of countries along the route have a significant promoting effect on China’s OFDI,while inflation and foreign trade dependence have a slight promoting effect on China’s OFDI.The economic distance between the two countries has a significant inhibitory effect on China’s OFDI.Finally,based on the empirical results,this article proposes countermeasures and suggestions from both the government and enterprises: the Chinese government should strengthen the establishment of cooperation and dialogue mechanisms with countries along the route,improve the investment risk prevention and control system,and focus on improving the domestic business environment to provide complete legal protection mechanisms for foreign investors.Chinese enterprises should comprehensively evaluate the business environment of countries along the route and adopt differentiated investment methods;At the same time,establish specialized departments to establish investment environment databases for countries along the route;In addition,it is necessary to pay attention to the segmentation indicators of the business environment and develop suitable management strategies.