Volume 29, Issue 2
DOI: 10.24205/03276716.2020.323
PSYCHOLOGICAL ANALYSIS OF ECONOMIC INVESTMENT AND ESTABLISHMENT OF PSYCHOLOGICAL DISTANCE BASED ON RESOURCE CARRYING CAPACITY
Abstract
At present, investment psychology is widely used in foreign investment, which is increasingly affected by psychological distance. It is of great significance for each country to clarify the influence of investment psychology and psychological distance on foreign investment. From the perspective of psychological distance, this paper establishes an empirical model based on resource carrying capacity, and applies it to study China’s foreign direct investment (FDI), in the light of investment psychology. On this basis, forward countermeasures and suggestions were put forward to improve China’s FDI. The results show that China’s FDI has entered a stage of rapid development, as evidenced by the continued growth in investment amount and investment field, and the investment areas mainly concentrate in Asia, Europe and the US; there are four main dimensions of psychological distance, namely, institution, culture, geography and environment; psychological distance and its four dimensions all have significant negative correlations with the FDI. The research results have strong theoretical and practical significance for the development of China’s foreign investment.
Keywords
Investment Psychology, Foreign Direct Investment (FDI), Psychological Distance, Carrying Capacity.