The Dynamic Panels With Threshold Effect of China's OFDI on Host Country Technological Progress: An Empirical Analysis Based on Different Types of Countries Along the Belt and Road

Abstract

Using the dynamic panel threshold model and data of 41 countries along “the Belt and Road” from 2003 to 2017, this paper empirically tests the impact of China’s outward foreign direct investment (OFDI) on technological progress of these countries and its threshold effect. The results show that OFDI exerts different effects on technological progress of countries along the route within different thresholds range. Based on the classification of different country types, when FD is below than the threshold value, China’s OFDI in transitional and developing countries has no significant impact on their technological progress, while developed countries have a more significant positive correlation; other, when FD is higher than the threshold value, both types of countries are significantly positively correlated, and the coefficient is greater in developed countries than in transitional and developing countries. In further research, it is divided into two periods based on the time node of 2013.