Abstract
The business environment of the host country is an important factor for every enterprise in the country of exporting foreign capital. In this study, the host country's business environment is the independent variable, China's OFDI stock of the host country is the dependent variable, and then several control variables are added to build the econometric model of China’s OFDI and the host country's business environment, collected data of 27 countries from 2009 to 2017 for empirical research, the results show that among the five variables representing the host country's business environment, in addition to commercial environmental regulation, the other four The variables macroeconomic management, legal governance, social protection and the quality of the trade environment are positively correlated with China's OFDI stocks, but only the regression coefficients of the two variables of commercial environmental regulation and legal governance are significant. The regression coefficient of market size and openness in the control variables is positive and significant.
Highlights
Hypothesis [1,2,3]: there is a positive correlation between the legal governance of the host country and China's foreign direct investment as a whole; Governance according to law refers to a country's respect for property rights and contractual rights, as well as the role of the social legal system in promoting enterprise activities
Hypothesis [1,2,3,4]: there is a positive correlation between the social protection of the host country and China's foreign direct investment on the whole; Social security refers to a country's government policy on social security and labor market regulations, which aims to reduce the risk of poverty and improve the social welfare level of the poor
The regression coefficient of the degree of openness of the host country is 0.091, which is significant at the level of 10%, that is, every 1% fluctuation of the degree of openness of the host country can cause China's OFDI stock scale to fluctuate in the same direction, and the fluctuation range is 0.091%, indicating that the degree of openness of the host country is the factor attracting China's OFDI
Summary
Eifert B (2009) found in the study of the relationship between the host state-owned business environment and FDI that every 0.4% fluctuation of the host state-owned business environment can cause the same direction fluctuation of FDI inflow scale by 0.6%. Jayasuriya D (2011) found that the better the host state-owned business environment, the larger the scale of FDI inflow. Ross J (2016) synthesized the business environment data of the world bank and the U.S OFDI data, studied the relationship between the host state-owned business environment and the U.S OFDI by building a panel data model, and found that on the whole, the business environment of the host country showed a positive correlation with the U.S OFDI, and the impact coefficient of developed countries was higher than that of developing countries
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