ZHOU Haichuan:Government Agreements, Institutional Environment and FDI in Land

Abstract  By using the land investment data of GRAIN, which is an international non-profit organization, this paper analyzes the success or failure factors of FDI behavior in land. The results indicate that the institutional environment of host country will affect the success rate of investment in land transactions, land investment agreement between the two governments is conducive for investors in the host country to carry out land investment activities, and the performance remains even more remarkable in the host country with good quality of institutional environment. “China factor” is not conducive to our investors in overseas land investment, and it affects the success rate of land investment coupled with land area. In addition, per capita GDP and foreign investment openness of host country is conducive to foreign direct investment in lands, and colonial relations, administrative distance, host countrys market scale have significantly negative correlation with the success rate of FDI in land. There exists a U-curve relation between land area and the success rate of land investment.Overseas acquisition experience is conducive to investment, but the diversification of investment, usage of land, entry models and future investment plans have no significant influence on success rate. Selecting investment location according to the institutional environment, establishing bilateral contact mechanisms with the host country, emphasizing the role of the media, strengthening cultural transmission, extensively drawing overseas investment experience, and making rational foreign investment land area plan can be conductive to Chinas overseas land investment behavior.

Key words： FDI in Land      Institutional Environment      Intergovernmental Investment Agreement      China Factor

Source: Finance & Trade Economics , No.8, 2014