Investment risk and natural resource potential in “Belt & Road Initiative” countries: A multi-criteria decision-making approach

Abstract

Chinese enterprises that conduct overseas investment projects encounter diverse challenges that emerge from political, economic, social, and environmental risks in the host countries. To better assess the overseas investment risks faced by Chinese enterprises, this study introduced and assessed novel aspects and an indicator system. Moreover, the “Technique for Order Preference by Similarity to Ideal Solution” (TOPSIS) method based on entropy weight was performed to generate a comprehensive assessment of China's foreign investment risk and natural resource potential in 63 “Belt & Road Initiative” (BRI) countries. This study aims to encourage Chinese enterprises to devise suitable overseas investment decision-making strategies concerning natural resource potential in host countries. A Geographic Information System (GIS) map was also created to assess the potential risks and opportunities for Chinese enterprises when making investment decisions in host countries. The findings indicate that the majority of countries in Central and Eastern Europe and other BRI countries such as Singapore, Malaysia, Nepal, Bhutan, Russia, Armenia, and the United Arab Emirates were the most suitable choices for Chinese enterprises engaging in overseas investment. Based on these results, Chinese enterprises could manage and execute BRI projects more effectively to minimise potential risks and maximise their investment benefits.