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One Belt One Road and the Determinants of OFDI of China

  • Journal of Asia-Pacific Studies
  • Abbr : JAPS
  • 2020, 27(3), pp.33-51
  • DOI : 10.18107/japs.2020.27.3.002
  • Publisher : Institute of Global Affairs
  • Research Area : Social Science > Social Science in general
  • Received : August 17, 2020
  • Accepted : August 30, 2020
  • Published : September 30, 2020

Choi Young Jun 1 MENGDEHUA 2

1경희대
2경희대학교

Accredited

ABSTRACT

This study analyzed one-belt-one-road(OBOR) initiative and the determinants and the pattern of China’s foreign direct investment. The OBOR Initiative is China’s core political and diplomatic policy that affects foreign direct investment. This study analyzed China’s foreign direct investments in 130 countries from 2008 to 2017 using the GLS model based on the gravity model. The results of the study showed that GDP and the distance which determines the transaction cost, and whether or not a free trade agreement are significant. And the resoureces of destination countries are significant where its R&D is not significant. The OBOR is shown as an important factor that determine the pattern of FDI where it does not affect its FDI quantatively. The pattern of FDI of China in the target countries of OBOR is different from that of non-target countries. In other words, FDI of China is concentrated in countries with abundant energy resources in the OBOR route target countries, and in the countries rich in labor in the non-target countries.

Citation status

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This paper was written with support from the National Research Foundation of Korea.