maximization objective and the strategy of choosing locations based on local comparative advantages.

In sum, the literature finds that China’s ODI tends to be attracted to larger markets and rich resource areas just like other countries’ ODI. What differentiates Chinese investors is that they are more willing to invest in risky environments. At the firm level, evidence shows that more productive firms and less financially constrained firms are more likely to invest abroad. Investing abroad also makes investing firms more productive and grow faster. While studies on the determinants of China’s ODI are extensive, relatively little work has been done to evaluate the impacts of Chinese ODI.

# 2.4 Reports on BRI

Existing economic analysis of the BRI is very limited. Most of the available discussions are descriptive reports. For example, Johnson’s (2016) CSIS report provides a general assessment of the BRI and discusses the benefits of BRI to China. It also documents the responses from participating and non-participating countries. The Economist (2016) published a report on BRI countries using data from InfraPPP and Competitiveness Group/Long-term Asset Infrastructure to provide a general outlook of the ongoing infrastructure projects in each BRI country. American Enterprise Institute’s Scissors et al (2017) also provides a descriptive summary of China’s outward investment since the introduction of the BRI and argues that China’s increasing construction projects in BRI could become costly for recipient countries to maintain. Similar concerns have been expressed by Dollar (2017), who observes that most of China’s ODI still flows to rich developed countries. He also points out that Chinese investors’ willingness to take risk will benefit BRI countries. A similar point is made in another report by the Economist (2017) which characterized BRI countries as high opportunities but also high risk countries. UNDP China et al (2017) suggests that the initiative can help BRI countries achieve industrial diversification and economic growth and discussed the conditions for achieving the Sustainable Development Goals.

# 3. Data and Stylized Facts

In this section, we describe the main data sources of FDI and related economic characteristics and an array of stylized facts emerging from the data.

# 3.1 Foreign Investment in BRI: Data and Patterns

The main sources of FDI data used are UNCTAD’s bilateral FDI flow database and China Global Investment Tracker. In addition, we have also collected FDI statistics from individual countries’ official agencies as supplementary data.<sup>7</sup>

> 7 Generally, four types of FDI data have been used for economic analysis in the literature, including (i) aggregate FDI data from international agencies such as UNCTAD and OECD which tend to provide a relatively comprehensive country coverage; (ii) MNC activity data from national agencies, which offer national coverages but usually impose strict nationality and other restrictions on access and are not available systematically across countries; (iii) proprietary firm ownership or mergers and acquisitions (M&A) data sets provided by publishers such as Dun & Bradstreet, Bureau van Dijk,

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