Abstract
This paper empirically investigates the impact of China’s OFDI on the industrial structure upgrading of countries along the Belt and Road (B&R) and examines the threshold effect of the infrastructure levels on that impact based on the panel data of 52 B&R countries from 2006 to 2017. The results show that China’s OFDI can significantly promote the industrial structure upgrading of B&R countries and that the Belt and Road initiative implementation can help to strengthen the promoting effects of China’s OFDI in the comprehensive FGLS, the Diff-GMM and the System GMM estimation. Moreover, China’s technology transfer OFDI has the greatest promotion effect, followed by capital transfer OFDI; labor transfer OFDI has the least promotion effect. China’s OFDI plays a larger role in promoting the industrial structure upgrading of Central Asia and South Asia countries, followed by ASEAN and CIS countries and it plays a smaller role in West Asia and Central-Eastern Europe countries. There is a threshold effect of the B&R countries’ infrastructure level. When the transportation infrastructure, energy infrastructure, communication infrastructure and overall infrastructure levels exceed the corresponding thresholds, the promoting effect of China’s OFDI will be further enhanced in the comprehensive FGLS estimation. Our study proposes that under the Belt and Road initiative, to improve the infrastructure level of the B&R countries, and to increase the effectiveness of China’s OFDI in promoting the industrial structure upgrading of the B&R countries, China should further strengthen international cooperation, expand outward investment, and strengthen the infrastructure connectivity construction with B&R countries.
