Study on the Impact of Host Country ICT Development Level on China's OFDI Efficiency

Abstract

The connotation of ownership advantages driving Chinese OFDI in the context of the IT revolution has changed significantly, and the level of ICT development in host countries may become a new type of locational advantage to attract foreign investment. In this paper, we investigate the impact of host country ICT advantage on Chinese OFDI and measure the efficiency of Chinese investment in 108 host countries from 2006 to 2015 with the help of the time-varying stochastic frontier gravity model, and empirically test the factors affecting investment efficiency, focusing on the impact of host country ICT development level on Chinese OFDI efficiency. It is found that overall the level of ICT development in host countries promotes the efficiency of Chinese OFDI; after distinguishing the sample into developed and developing countries, the level of ICT development in host countries has a differential impact effect on the efficiency of Chinese OFDI. This study helps us to better understand the relationship between Chinese OFDI and the ICT development level of host countries, and it has important insights for constructing new advantages in outward investment cooperation and improving the efficiency of outward FDI.