Study on the Impact of Institutional Environment in Host Countries on the Outward FDI of China

In view of Institution theory, this paper studied the impact of institution environment of host country on the outward direct investment of China. Based on the data of our outward direct investment to 99 countries, this paper used principal components analysis to establish the institutional index of host countries. This paper finds out the institutional index of host countries has a significant positive relationship with our country's outward FDI. In addition, the Macro-economic index in host countries is a mediator between the institutional index of host countries and our country's outward FDI. And when our enterprises invest in other countries, they will not only choose better institutional environment but also consider the level of economic situation in the host country.