A Review of the Literature on Chinese OFDI, Institutional Environment, and Institutional

Abstract

Researchers mostly utilize the World Governance Indicators (WGI) to quantify institutional quality and bilateral institutional distance because there is currently no widely acknowledged way to compute institutional distance or quality. The influence of the bilateral institutional environment on China's OFDI is not consistent when it comes to institutional quality; in fact, opinions vary. This paper looks at the relationship between absolute institutional factors and bilateral institutional distance as well as the location choice of Chinese OFDI. There are notions of institutional risk aversion and preferences when it comes to institutional distance, and conceptions of institutional escape and intimacy when it comes to institutional excellence. As research progresses, more and more academics are realizing how important it is to perform heterogeneity assessments of different countries, local firms, etc.

Keywords- Review Literature, Chinese OFDI, Institutional Environment.