Abstract
This paper aims to study the determinants of location choice of China's direct energy investment in BRI countries. It also attempts to analyze the impact of the Belt and Road Initiative on the effect of national distance. For this purpose, the gravity model is applied to the data over the period 2003–2017. The main results show that economic distance, geographical distance, and institutional distance hinder the location choice of China's OFDI in the energy sector, but the effect of cultural distance is uncertain. Second, the Belt and Road Initiative has increased China's direct energy investment in BRI countries but has not changed the influence of national distance on location choice significantly. Furthermore, renewable energy is attracting investment from Chinese firms in developed countries. Finally, the paper makes suggestions on strengthening the institutional quality of the host country, building energy pipelines, strengthening the cooperation of renewable energy, and enhancing the diversity of investment choices.
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