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The quality of host government and China’s OFDI: Construction of micro-evaluation model of government quality

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  • Yang, Yi
  • Li, Xiao

Abstract

Government is not only an important participant in the process of national governance, but also a firm executor and supervisor of national policies. In the process of China’s active promotion of outward foreign direct investment (OFDI), the risks caused by the poor quality of the host government have not been paid enough attention to. This paper builds a micro-evaluation model of government quality from four aspects based on the quality of government expert survey. The results show that although the scores of developed countries are generally higher than those of developing countries, the growth of China’s OFDI in developing countries is higher than in developed countries. In particular, the growth of investment to the member states of The Belt and Road Initiative is more significant. How to realize mutually beneficial achievements between China's overseas investment and host countries with low government quality is an important issue for China.

Suggested Citation

  • Yang, Yi & Li, Xiao, 2021. "The quality of host government and China’s OFDI: Construction of micro-evaluation model of government quality," Journal of Asian Economics, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:asieco:v:74:y:2021:i:c:s1049007821000427
    DOI: 10.1016/j.asieco.2021.101313
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    References listed on IDEAS

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