Comparative study on infrastructure and export trade of the host country and OFDI efficiency of China

Abstract

The Belt and Road Initiative (BRI) provides new opportunities and great space for China’s outward foreign direct investment (OFDI) cooperation, as evidenced in 2018 when it financed US$15.64 billion in 56 countries along this burgeoning economic path, targeting Europe, Africa, and Asia as its hot spots. However, most of the countries along the Belt and Road are low-growth, middle-income, and developing economies, and their infrastructure, export trade, and other factors play an important role in the security and efficiency of OFDI. Therefore, this research selects 60 countries in Europe, Asia, and Africa as the objects and uses the common boundary SBM model to calculate the investment efficiency of 7 indicators from 2013 to 2017. The results show a significant regional gap in the efficiency of China’s total foreign investment. The efficiency scores of European countries are generally better than those of Asian and African countries, while the technology gaps of countries in Asia and Europe are higher than that in Africa. The efficiencies of three major indicators, FDI, infrastructure development indicator (IDI), and export trade (ET), exhibit four types of distribution. Therefore, it is necessary to coordinate and optimise the proper investment layout, enhance China’s investment quality in countries along the Belt and Road, strengthen exchanges and cooperation between think tanks, and promote further construction of BRI.

Keywords:

• The Belt and Road
• OFDI efficiency
• host country infrastructure
• export trade
• Europe
• Asia
• and Africa

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Data from the Statistical Bulletin of China’s Outward Foreign Direct Investment of 2018.

2 Due to space constraints, these countries with efficiency values of 1 for all five years are not shown in Table 3.

Additional information

Notes on contributors

Fang-rong Ren

Fang-rong Ren is a associate professor from Nanjing Forestry University of China. The research interests are efficiency evaluation of foreign investment, Energy economics and Environmental assessment.

Xin-ge Guan

Xin-ge Guan is a doctoral student from Hohai University of China. The research interests are foreign investment and technical innovation.

Huai-jing Zhang

Huai-jing Zhang is a researcher from Nanjing Jiangbei Public Utility Construction Engineering Co., Ltd of China. The research interest is economic issues in developing countries.

Qi Fang

Qi Fang is a master degree candidate from Hohai University of China. The research interest is the outward investment of developing countries.

Hong-cheng Si

Hong-cheng Si is a master degree candidate from Hohai University of China. The research interests are The Belt and Road Initiative and investment returns.

Ze Tian

Ze Tian is a professor from Hohai University of China. The research interest is management of multinational corporations.