IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i17p4724-d262274.html
   My bibliography  Save this article

Pattern and Influencing Factors of Foreign Direct Investment Networks between Countries along the “Belt and Road” Regions

Author

Listed:
  • Quan He

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Xishen Cao

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

Abstract

With the in-depth implementation of the “Belt and Road” initiative (BRI), the investment patterns between Belt and Road countries have also become more complicated. The impact of this complex investment network on regional economic development is also growing. To reveal the complexity of this investment pattern, and to better promote the sustainable development of the region’s economy, this paper used the complex network method to study the foreign direct investment (FDI) network of 50 countries along the Belt and Road from 2003 to 2017, revealing its structural and behavioral characteristics and evolution process. The results showed that the imbalance of the investment network structure is outstanding, and preferential selection behavior is obvious. The Central and Eastern European countries show significant clustering behavior. In addition, the network evolved slowly and followed the “Pareto rule” in the early stages of its evolution. The BRI was a turning point in the evolution process. On this basis, the quadratic assignment procedure (QAP) regression analysis method was used to further study the factors affecting the formation process of this investment pattern. It found that economic development level, geographical distance, and bilateral trade were the main influencing factors. Among them, bilateral trade had the greatest impact on the pattern of network.

Suggested Citation

  • Quan He & Xishen Cao, 2019. "Pattern and Influencing Factors of Foreign Direct Investment Networks between Countries along the “Belt and Road” Regions," Sustainability, MDPI, vol. 11(17), pages 1-23, August.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:17:p:4724-:d:262274
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/17/4724/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/17/4724/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2010. "The evolution of the world trade web: a weighted-network analysis," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 479-514, August.
    2. De Masi, G. & Giovannetti, G. & Ricchiuti, G., 2013. "Network analysis to detect common strategies in Italian foreign direct investment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(5), pages 1202-1214.
    3. Agnès Bénassy‐Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, May.
    4. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    5. Hao, Xiaoqing & An, Haizhong & Qi, Hai & Gao, Xiangyun, 2016. "Evolution of the exergy flow network embodied in the global fossil energy trade: Based on complex network," Applied Energy, Elsevier, vol. 162(C), pages 1515-1522.
    6. John H. Dunning, 1977. "Trade, Location of Economic Activity and the MNE: A Search for an Eclectic Approach," Palgrave Macmillan Books, in: Bertil Ohlin & Per-Ove Hesselborn & Per Magnus Wijkman (ed.), The International Allocation of Economic Activity, chapter 12, pages 395-418, Palgrave Macmillan.
    7. Aleksynska, Mariya & Havrylchyk, Olena, 2013. "FDI from the south: The role of institutional distance and natural resources," European Journal of Political Economy, Elsevier, vol. 29(C), pages 38-53.
    8. Yang, Jiao-Hui & Wang, Wei & Wang, Kai-Li & Yeh, Chung-Ying, 2018. "Capital intensity, natural resources, and institutional risk preferences in Chinese Outward Foreign Direct Investment," International Review of Economics & Finance, Elsevier, vol. 55(C), pages 259-272.
    9. Peter J Buckley & L Jeremy Clegg & Adam R Cross & Xin Liu & Hinrich Voss & Ping Zheng, 2007. "The determinants of Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 499-518, July.
    10. Haiyue Liu & Jie Jiang & Lei Zhang & Xiaolan Chen, 2018. "OFDI Agglomeration and Chinese Firm Location Decisions under the “Belt and Road” Initiative," Sustainability, MDPI, vol. 10(11), pages 1-22, November.
    11. Chakrabarti, Avik, 2001. "The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-113.
    12. Shi, Jianglan & Li, Huajiao & Guan, Jianhe & Sun, Xiaoqi & Guan, Qing & Liu, Xiaojia, 2017. "Evolutionary features of global embodied energy flow between sectors: A complex network approach," Energy, Elsevier, vol. 140(P1), pages 395-405.
    13. Douglas E. Thomas & Lorraine Eden & Michael A. Hitt & Stewart R. Miller, 2007. "Experience of emerging market firms: The role of cognitive bias in developed market entry and survival," Management International Review, Springer, vol. 47(6), pages 845-867, December.
    14. Lili Kang & Fei Peng & Yu Zhu & An Pan, 2018. "Harmony in Diversity: Can the One Belt One Road Initiative Promote China’s Outward Foreign Direct Investment?," Sustainability, MDPI, vol. 10(9), pages 1-28, September.
    15. M. Gligor & M. Ausloos, 2008. "Clusters in weighted macroeconomic networks: the EU case. Introducing the overlapping index of GDP/capita fluctuation correlations," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 63(4), pages 533-539, June.
    16. Xu, Tao, 2019. "Economic freedom and bilateral direct investment," Economic Modelling, Elsevier, vol. 78(C), pages 172-179.
    17. Feng Wang & Mengnan Gao & Juan Liu & Wenna Fan, 2018. "The Spatial Network Structure of China’s Regional Carbon Emissions and Its Network Effect," Energies, MDPI, vol. 11(10), pages 1-14, October.
    18. Cheng, Leonard K. & Kwan, Yum K., 2000. "What are the determinants of the location of foreign direct investment? The Chinese experience," Journal of International Economics, Elsevier, vol. 51(2), pages 379-400, August.
    19. Xu, Helian & Cheng, Long, 2016. "The QAP weighted network analysis method and its application in international services trade," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 448(C), pages 91-101.
    20. Giorgio Barba Navaretti & Anthony J. Venables, 2006. "Facts and Issues, from Multinational Firms in the World Economy," Introductory Chapters, in: Multinational Firms in the World Economy, Princeton University Press.
    21. Zhaobin Fan & Ruohan Zhang & Xiaotong Liu & Lin Pan, 2016. "China’s outward FDI efficiency along the Belt and Road," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 8(3), pages 455-479, September.
    22. Avik Chakrabarti, 2001. "The Determinants of Foreign Direct Investments: Sensitivity Analyses of Cross‐Country Regressions," Kyklos, Wiley Blackwell, vol. 54(1), pages 89-114, February.
    23. Li, Huajiao & An, Haizhong & Fang, Wei & Wang, Yue & Zhong, Weiqiong & Yan, Lili, 2017. "Global energy investment structure from the energy stock market perspective based on a Heterogeneous Complex Network Model," Applied Energy, Elsevier, vol. 194(C), pages 648-657.
    24. Giorgio Barba Navaretti & Anthony J. Venables, 2006. "Multinational Firms in the World Economy," Economics Books, Princeton University Press, edition 1, volume 1, number 7832.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mohammed Ismail Alhussam & Jifan Ren & Hongxing Yao & Omar Abu Risha, 2023. "Food Trade Network and Food Security: From the Perspective of Belt and Road Initiative," Agriculture, MDPI, vol. 13(8), pages 1-19, August.
    2. Yujing Wang & Fu Ren & Ruoxin Zhu & Qingyun Du, 2020. "An Exploratory Analysis of Networked and Spatial Characteristics of International Natural Resource Trades (2000–2016)," Sustainability, MDPI, vol. 12(18), pages 1-34, September.
    3. Suo Qi & Wang Liyuan & Yao Tianzi & Wang Zihao, 2021. "Promoting Metro Operation Safety by Exploring Metro Operation Accident Network," Journal of Systems Science and Information, De Gruyter, vol. 9(4), pages 455-468, August.
    4. Jie Yin & Yahua Bi & Yingchao Ji, 2020. "Structure and Formation Mechanism of China-ASEAN Tourism Cooperation," Sustainability, MDPI, vol. 12(13), pages 1-19, July.
    5. Hosn el Woujoud Bousselmi & Lorena Caridad & Nuria Ceular Villamandos, 2019. "Structural Models in Corporate Social Responsibility: Attraction of Investment in Tunisia," Sustainability, MDPI, vol. 11(18), pages 1-11, September.
    6. Hannes Thees, 2020. "Towards Local Sustainability of Mega Infrastructure: Reviewing Research on the New Silk Road," Sustainability, MDPI, vol. 12(24), pages 1-35, December.
    7. Yue Pu & Yunting Li & Jinjin Zhang, 2023. "Features and evolution of the ‘Belt and Road’ regional value chain: Complex network analysis," The World Economy, Wiley Blackwell, vol. 46(7), pages 2134-2156, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lili Kang & Fei Peng & Yu Zhu & An Pan, 2018. "Harmony in Diversity: Can the One Belt One Road Initiative Promote China’s Outward Foreign Direct Investment?," Sustainability, MDPI, vol. 10(9), pages 1-28, September.
    2. Federico Carril-Caccia & Juliette Milgram-Baleix & Jordi Paniagua, 2019. "Foreign Direct Investment in oil-abundant countries: The role of institutions," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-23, April.
    3. Raphael Chiappini & François Viaud, 2021. "Macroeconomic, institutional, and sectoral determinants of outward foreign direct investment: Evidence from Japan," Pacific Economic Review, Wiley Blackwell, vol. 26(3), pages 404-433, August.
    4. Le Chang & Jing Li & Kee-Cheok Cheong & Lim-Thye Goh, 2021. "Can Existing Theories Explain China’s Outward Foreign Direct Investment in Belt and Road Countries," Sustainability, MDPI, vol. 13(3), pages 1-17, January.
    5. Federico Carril-Caccia & Juliette Milgram Baleix & Jordi Paniagua, 2019. "The foreign direct investment-institution nexus in oil-abundant countries," Working Papers 1903, Department of Applied Economics II, Universidad de Valencia.
    6. Wasseem Mina, 2018. "Labor Market Policies and FDI Flows to GCC Countries," Working Papers 1201, Economic Research Forum, revised 27 May 2018.
    7. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    8. Ling Feng & Lulan Ge & Zhiyuan Li & Ching‐Yi Lin, 2022. "Financial development and natural resources: The dynamics of China’s outward FDI," The World Economy, Wiley Blackwell, vol. 45(3), pages 739-762, March.
    9. Sarker, Bibhuti & Serieux, John, 2023. "Multilevel determinants of FDI: A regional comparative analysis," Economic Systems, Elsevier, vol. 47(3).
    10. Yahui Chen & Changsheng Xu & Ming Yi, 2019. "Does the Belt and Road Initiative Reduce the R&D Investment of OFDI Enterprises? Evidence from China’s A-Share Listed Companies," Sustainability, MDPI, vol. 11(5), pages 1-14, March.
    11. De Beule, Filip & Duanmu, Jing-Lin, 2012. "Locational determinants of internationalization: A firm-level analysis of Chinese and Indian acquisitions," European Management Journal, Elsevier, vol. 30(3), pages 264-277.
    12. Tiago Loncan, 2021. "The Effects of Project Scale on FDI Location Choices: Evidence from Emerging Economies," Management International Review, Springer, vol. 61(2), pages 157-205, April.
    13. George Owusu-Antwi & Dwobeng Owusu Nyamekye & Patrick Ofei & Frederick A. Aikens, 2019. "Foreign Direct Investment: Is Natural Resources the Rejoin? Evidence from Ghana, Nigeria, and Togo: Fixed Effect Approach," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 9(12), pages 588-606, December.
    14. Manamba EPAPHRA & John MASSAWE, 2017. "The Effect of Corruption on Foreign Direct Investment: A Panel Data Study," Turkish Economic Review, KSP Journals, vol. 4(1), pages 19-54, March.
    15. Zhang, Xiaoxi & Daly, Kevin, 2011. "The determinants of China's outward foreign direct investment," Emerging Markets Review, Elsevier, vol. 12(4), pages 389-398.
    16. Amighini, Alessia A. & Franco, Chiara, 2013. "A sector perspective on Chinese outward FDI: The automotive case," China Economic Review, Elsevier, vol. 27(C), pages 148-161.
    17. Shuzhong Ma & Mengheng Liu, 2020. "Spatial correlation effect of China's outward foreign direct investment in countries along the One Belt and One Road," Pacific Economic Review, Wiley Blackwell, vol. 25(2), pages 228-249, May.
    18. Menna, Khaled & Mehibel, Samer, 2018. "Les pays de l’Afrique du Nord et les IDE face à la problématique de l’attractivité [North African countries and FDI facing the issue of attractiveness]," MPRA Paper 85559, University Library of Munich, Germany.
    19. Gammeltoft, Peter & Cuervo-Cazurra, Alvaro, 2021. "Enriching internationalization process theory: insights from the study of emerging market multinationals," Journal of International Management, Elsevier, vol. 27(3).
    20. Wang, Xiaoying & Anwar, Sajid, 2022. "Institutional distance and China's horizontal outward foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 78(C), pages 1-22.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:17:p:4724-:d:262274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.