Abstract:

As the largest developing country, China has accelerated the implementation of the "One Belt and One Road" strategy to cope with the drastic changes in the international investment environment. The importance of intellectual property was highlighted at the One Belt and One Road high-level meeting on intellectual property. This paper discusses the relationship between intellectual property system distance and OFDI based on the consideration of domestic and international influencing factors of OFDI. This study analyzed based on the panel data between 49 developing countries from 1994 to 2014 and between China and 46 "One Belt and One Road" countries from 2003 to 2014.The stability of panel data should be tested first before the regression analysis of panel data. In this paper, LLC unit root test method is adopted to carry out the stationarity test. Before the panel model is estimated, Hausman and Kuersteiner (2008) test is required to determine whether the fixed-effect model or the random-effect model is adopted. The main research conclusions are as follows: first, the economic growth in developing countries, research and development investment, foreign investment level, currency appreciation and export levels for domestic enterprises has a promoting effect for foreign investment activities. The formation of enterprise ownership advantage in developing countries depends on both domestic economic development and external international economic situation. It is found that the influence of intellectual property system on investment in developing countries is approximately inverted u-shaped with the change of distance from negative to positive. When they invest in developing countries with a relatively close and positive distance to the intellectual property system, the impact of the intellectual property system on outward FDI is negative. This is because the better system of the host country may form an obstacle to the enterprises in the imperfect system. One of the purposes of some developing countries' foreign investment is to acquire advanced technologies from other countries. Although the intellectual property protection level of other developing countries is only slightly higher than that of their own countries, it may still become an obstacle for their own countries to acquire higher technologies from foreign countries. When it invests in developed countries whose intellectual property protection level is much higher than that of its home country, the huge intellectual property system distance becomes the barrier for it to enter the host country. When it invests in backward countries, the same poor intellectual property system increases the operating costs of enterprises.Second, China's investment in "One Belt and One Road" countries shows special rules in different regions such as southeast Asia, central Asia and west Asia. Economic growth, investment in R&D and the level of FDI are conducive to the investment enthusiasm of Chinese enterprises (especially state-owned enterprises). The impact of exchange rates on Chinese investment in "One Belt and One Road" countries varies from region to region. The effect of export on foreign investment is negative in southeast Asia and west Asia, but positive in other regions. This is related to the stage of China's export in the host country. The influence of China's intellectual property system distance on different regions of "One Belt and One Road" is positive, negative and insignificant, which mainly depends on the scale of technology transfer and the influence of other formal and informal systems in the host country. China's influence is positive in southeast Asia and central Asia, negative in South Asia and west Asia, but not significant in central and eastern Europe and the commonwealth of independent states. This is due to the investment in the fields of electric power and mining resources exploitation in southeast Asia and petroleum exploration and exploitation, transportation and communication construction, chemical industry and other fields in central Asia, all of which involve international technology transfer. The smaller intellectual property system distance promotes the technology transfer and transformation. As a formal system, the intellectual property system itself will be affected by factors such as the informal system and local political stability in the process of implementation. Armed conflicts, religious conflicts and terrorist attacks in west Asia and doubts and resistance of the people in South Asia will all have negative effects on the intellectual property system. On the whole, the scale of investment in central and eastern Europe and CIS is small, involving less transnational knowledge transfer, so the impact of intellectual property system distance is not significant. The results show that the improvement of China's intellectual property system plays a positive role in expanding its investment in "One Belt and One Road" countries.According to the research conclusions, the following policy implications can be drawn:first, developing countries should improve the quality of their economic development. We will continue to optimize the economic structure and accelerate the transformation of economic growth drivers, so as to strengthen the advantages of enterprise ownership. Give full play to the role of the private sector and encourage the participation of the domestic private sector in the wider economy through the public-private partnership (PPP) programme. Second, developing countries should optimize the way they invest in research and development. Most R&D investment in developing countries mainly relies on project funding. In reality, enterprises with a certain development and R&D foundation usually get the project funding in the end. We will make full use of the AIIB and the silk road fund to fund advanced technology research and development for projects that are in line with the "One Belt and One Road" strategy. Third, China is further opening up to the outside world. Comprehensive promotion of free trade zone model to reduce export costs; The negative list will be further reduced to speed up the internationalization of RMB and the marketization of exchange rate.Fourth, China has established a sub-industry investment directory. It is easier to succeed investing in areas where the intellectual property regime is similar or to weaker our country. We should improve the protection of intellectual property rights system, enlarge the scope of intellectual property infringement, to expand the scope countries in which our country can successfully invest.

Key words: intellectual property institutional distance, outward foreign direct investment, developing country, One Belt and One Road