Empirical research on factors determining China´s OFDI location distribution

This paper uses 116 host countries´ cross-sectional data to empirically analyze the factors determining China´s Outward Foreign Direct Investment (OFDI) location distribution, and provides some recommendations on how to form the optimal investment policy. The empirical results obtained by WLS regression method show that host countries´ market scale, economic risk, FDI policy, investment continuity, culture connection and technology level have significant effect on OFDI flow; while market potential, resource endowment, labor cost and political risk do not. The main contribution of this paper is the revelation of significant difference in the factors determining China´s OFDI towards developed countries and developing countries by Chow test, which would further benefit improving investment policy.