Impact of Host Country's Trade Environment on Foreign Direct Investment

Author: Liu Donglin
Publisher:
Publish Date: 2005-09-01
Features: The author skillfully unifies international trade and international direct investment, analyzing the impact of host country trade environment and its major factors on FDI from both theoretical and empirical perspectives. The theoretical analysis consists of two main parts: first, the fundamental theoretical framework of the entire analysis, which is the basic mechanism through which the trade environment affects FDI; second, a logical analysis of how trade environment and its major factors influence FDI with different motivations. Empirically, the author conducts correlation and simple regression analyses on relevant data from 39 major countries worldwide to identify the correlation between major trade environments and the regional distribution of FDI. In establishing the analytical model, the author evaluates and draws on different analytical methods from various perspectives in the field of "factors influencing FDI," attempting to seek a more suitable approach. At the same time, starting from the practical issues of how the trade environment affects FDI and combining China's actual conditions, the author seeks empirical validation on one hand and proposes constructive ideas on improving the level and targeting of foreign capital inflow from the perspective of enhancing the trade environment. This work holds certain theoretical and practical value.