Chinese outward FDI to the belt and road countries: determinants and implications to the host countries’ economic growth

The Belt and Road (B&R) initiative, introduced in 2013, has resulted in a noticeable increase in Chinese outward foreign (OFDI) in the countries belonging to this initiative. The purpose of this thesis is to examine determinants of Chinese OFDI to the B&R nations as well as the impacts of such investments on economic growth in the B&R countries. This study covers 55 B&R countries during 2006-2018. Both the panel data and SYS-GMM models are applied to reach the objectives. Regarding the determinants, key results are as follows: natural resources-seeking, market-seeking, the host country's institutional environment, exchange rate and the geographical distance are the critical drivers in pulling the Chinese OFDI to those countries. After "the Belt and Road" initiative, market-seeking OFDI has become more important motivation while natural-resources seeking has played less important role. Regarding the impacts on the B&R countries, the results show that the Chinese OFDI could promote economic growth of these countries, especially after the B&R initiatives. However, the country government debt is the critical factor in enhancing the role of such OFDI on economic growth in those countries. Technological development, degree of trade openness and labour market conditions in the B&R nations are crucial in promoting their economic growth.