1.3　Definition of Related Concepts and Research Questions

1.3.1　Definition of Related Concepts

1.3.1.1　Economic risk

The connotation and extension of investment risk are extensive. Therefore，scholars have inconsistent definitions of investment risk and its scope in the related studies. Based on previous studies，investment risk can be defined as the possibility that multinational enterprises will suffer losses due to changes in the investment environment of the host country in the process of Chinese firms going global（McGowan and Moeller，2009）. As an aspect of investment risk，economic risk refers to the possibility that the investment return rate or investment interest will decrease due to changes in the host country's economic structure，economic growth rate，or economic policy adjustment in the process of foreign direct investment（Wang and Qi，2011）.

Economic risk often has a significant impact on OFDI，but the degree varies. For example，Wang and Gao（2012）study the effect of country economic risk on China's OFDI，and point out that both home and host country economic risks can significantly affect China's OFDI，and host country economic risk is negatively correlated with China's OFDI，while the home country economic risk is positively correlated with China's OFDI. Topal and Gul（2016）find that economic risk is significantly and negatively correlated with foreign direct investment. It is generally believed that the sources of economic risk include many aspects，such as economic volume，economic growth rate，inflation，the balance of payments，and budget balance（McGowan and Moeller，2009）. And there are many corresponding indicators of economic risks.This research uses the above economic risk index as a measure of economic risk. The above economic risk index includes five aspects：GDP per capita，real GDP growth rate，annual inflation rate，budget balance as a percentage of GDP，and current account as a percentage of GDP. In the following empirical analysis，this book will analyze the heterogeneous impact of these risk components on investment efficiency.

1.3.1.2　Infrastructure

According to the definition of the World Bank（2001），infrastructure generally refers to engineering and technical facilities and public service facilities that provide public services for social production and residents' living. The former is economic infrastructure，which refers to the long-term use of engineering structures，equipment，facilities，and the services they provide for economic production and households，including power facilities，transportation facilities，water conservancy facilities，communication facilities，etc. The latter is social infrastructure，mainly including education，culture，sports，health care，etc. In addition to the above classification standards，infrastructure can be divided into hard infrastructure and soft infrastructure. The hard infrastructure refers to material structures or facilities that can support social and economic development，such as transportation（including ports，roads，and railways），energy（electricity production，transmission grids，gas and oil pipelines），communications（mobile phones and the internet），and basic amenities. The soft infrastructure refers to soft facilities that can provide intangible support for the operation and development of hard infrastructures，such as policy and institutional frameworks，government administrative mechanisms，social networks，and procurement systems.

This book refers to the definition of the World Bank（2001）and define OFDII as outward foreign direct investment projects in the fields of telecommunications，electricity，natural gas，ports，railways，highways，airports，etc. According to relevant studies in the field of infrastructure，scholars believe that transportation，energy，and communication are the most important fields of foreign infrastructure investment，and these three categories are also the content of economic or hard infrastructure（Ramamurti and Doh，2004；Zhang et al.，2007；Luiz，2010）. According to the forecast of the World Economic Forum，the annual global infrastructure investment gap will reach US$1 trillion in the next ten years，and the investment gap is mainly concentrated in infrastructure fields such as transportation，energy，and communication（World Economic Forum，2017）.

Considering the availability of data，this reseach selects appropriate indicators to measure China's OFDII. At the same time，this book also selects three primary infrastructure industries for research，namely transportation，communication，and energy.

1.3.1.3　Investment efficiency

The traditional classical economic theory does not put forward a clear concept of investment efficiency，but we can extend it from the resource allocation theory in the field of microeconomics to the capital flow in the area of macroeconomics. Microeconomics believes that the market can effectively adjust the macro-economy to equilibrium. That is，it is efficient without idle or waste of resources. This extends to the macroeconomic level，which means that no large-scale government-led investment has no macro-level efficiency loss. That is，“capital should automatically and quickly flow to where needed most”（Hu and Wang，2019）.

From the perspective of the capital flow of multinational enterprises，investment efficiency can be defined as the situation in which the actual value of the investment is consistent with the theoretical value. That is，there is no investment loss. In empirical studies on capital flow，investment efficiency is usually defined as the degree of deviation between the actual value of the investment and the theoretical value of the investment. Scholars have recognized that the risk usually affects investment efficiency and conducts related studies. For example，Buckley et al.（2007）use stochastic frontier models to examine the impact of factors such as political risk on China's OFDI efficiency，and suggest that China's OFDI is associated with high levels of political risk in the host country. Ji and Zhou（2018）study China's OFDI in 52 countries along the Belt and Road and its efficiency and find that the efficiency of China's OFDI in countries along the Belt and Road is at a low level，and the risks existing in the countries along the Belt and Road affect China's OFDI efficiency. Based on this，this book measures the efficiency of China's OFDII to demonstrate the efficiency level of China's foreign infrastructure investment.

1.3.1.4　Scope definition

The international community has widely responded to the proposal of the Belt and Road Initiative. According to the information provided by the Belt and Road Portal（yidaiyilu.gov.cn），as of March 23，2022，China has signed more than 200 cooperation documents on jointly building the Belt and Road Initiative with 149 countriesand 32 international organizations（Hu and Zhang，2022）. Based on the research purpose of this book，this research takes the above mentioned 149 Belt and Road countries as the research objects. Among the 149 countries，52 are in Africa，38 are in Asia，27 are in Europe，21 are in Latin America，and 11 are in Oceania. At the same time，58 of the 149 BRCs are located along the Belt and Road.