LAUSR

Abstract The Belt and Road initiative (B&R) provided high-level opportunities for China's outward foreign direct investment. This study uses China's thermal power industry as an example for selecting optimum investment locations based on the host countries' environmental regulations. The study proposes an environmental site selection model based on a principal component and panel regression analysis. Considering the results of the principal component analysis, the main influencing factors affecting China's thermal power industry outward foreign direct investment (CTP-OFDI) and the comprehensive score of B&R countries were screened. In addition, the regression analysis provided a ranking of attractiveness scores for each country. Combining the analysis and results, the study draws the following conclusions. (1) The factors influencing investment are diverse and comprehensive, and the main influencing factors include three aspects, industrial development, the social and political situation, and the ecological environment. (2) Environment regulations are a significant factor and have a negative relationship with CTP-OFDI. (3) The B&R countries could be divided into the preferred, alternative, inferior, and avoidable investment locations. To conclude, the countermeasures and suggestions for improving investments are proposed based on the results of the environmental site selection model.