Determinants of Chinese Direct Investment in Central-East Europe under the Belt and Road Initiative Framework: A Panel Data Analysis

The Chinese outward direct investment has experienced a dramatic growth worldwide under the Belt and Road Initiative (BRI) framework in the past few years, and naturally this growing Chinese capital also fosters the cooperation between Central East Europe (CEE) region and China. This research examines diversity of determinants holding impact on Chinese FDI flows from 2009~2018 in CEE region with implementation of panel data analysis, and our result partially explains what cause the heterogeneity concerning amount and density of Chinese capital in CEE countries. Our findings suggest us that generally countries with superior capacity in manufacturing sector and better performance in exportation are preferable capital destinations since Chinese investment is dominated by purposes like EU market access, relieving industrial overcapacity, industry upgrading, and a more effective integration of global industry chain. It is also illustrated in our findings that, from a macro perspective, it is intrinsic and inherent factors of individual economies and political concerns, rather than short-term financial factors, like financial market volatility, that could significantly determine the Chinese capital outflows in this region.