Does the Belt and Road Initiative cause more troubled Chinese overseas investments?

Using original linked firm-level panel data obtained from the China Global Investment Tracker and CSMAR dataset over the period 2005-2017, this paper investigates whether the Belt and Road Initiative (BRI) affected the probability of troubled Chinese overseas investments. We find that the probability of troubled Chinese overseas investments rose in the countries covered by the BRI. The finding is robust to various robustness checks. Furthermore, the European countries along the route witnessed the most troubled overseas investments associated with Chinese state-owned enterprises (SOEs), highlighting the hostility of some European partners towards Chinese SOEs. We provide evidence that increasing greenfield investment or cross-border merger and acquisition (M&A) and decreasing the number of new construction contracts by Chinese enterprises are more likely to cause trouble for overseas investments.