The impact of project ties on Chinese enterprises' foreign investment risks in “Belt and Road” initiative

Lu, Jin-Biao and Titkov, Dmitriy and Liu, Zhi-Qin (2025) The impact of project ties on Chinese enterprises' foreign investment risks in “Belt and Road” initiative. ACTA OECONOMICA, 75 (4). pp. 541-566. ISSN 0001-6373

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Abstract

The present study aims to develop an integrated approach to assessing and managing investment risks faced by Chinese enterprises, taking into account the influence of productivity levels and the development of project linkages on decision-making in the context of international investments. The research methodology employs discrete analysis based on complementary log-log regression, enabling the consideration of both the temporal dynamics of investment decision-making and the influence of host-country characteristics. The analysis draws on data from 200 Chinese companies engaged in project linkages across 15 Belt and Road Initiative countries between 2017 and 2024. The findings indicate that the reduction of investment risks in the process of international expansion is generally achieved through high enterprise productivity and the selection of host countries with more stable institutional and economic environments. The study reveals that project linkages function as a form of institutional support, reducing entry barriers and facilitating investment flows into resource-rich countries with a well-developed labour base. The practical significance of the study lies in the development of methodological tools for diagnosing and managing investment risks, which can be applied both by governmental bodies in shaping foreign economic policy and by corporate entities in designing entry strategies for foreign markets.

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