Study on the Impact of Digital Economy Development on China's OFDI in Countries Along the "Belt and Road" Route

Abstract

This paper constructs a theoretical analysis of the impact of the digital economy of the countries along the route on OFDI and its mechanism, determines the indicators to measure the level of development of the digital economy of the "Belt and Road" countries, and collects panel data on the development level indicators of 76 countries along the "Belt and Road" route from 2009 to 2019. We collect panel data of the development level indicators of 76 countries along the Belt and Road from 2009 to 2019. The geographic distance is introduced to construct the basic gravity model, followed by the introduction of the core explanatory variables of the level of digital economy development, and other control variables are the level of industrialisation, trade openness, natural resource endowment and labor force size to construct an extended gravity model, and then empirically analyse the impact of the digital economy of the countries along the Belt and Road on the OFDI of China. The results show that a 1% increase in the level of digital economy development in the countries along the route will lead to an increase in China's OFDI by at least 0.085%, provided that other influencing factors remain unchanged. Natural resource endowment and labor force size also have a positive relationship with China's OFDI, while geographical distance and trade openness have a negative effect on China's OFDI. Based on the results of the empirical analyses, this paper puts forward policy recommendations for the countries along the Belt and Road, as well as for China.