Spatial Distribution Characteristics and Influencing Factors of the Success or Failure of China’s Overseas Arable Land Investment Projects—Based on the Countries along the “Belt and Road”

Round 1

Reviewer 1 Report

Dear authors,

 

Firstly, I would like to thank you for your work in this field.

You did an excellent job!

I give a high comment on this manuscript.

For this current version, there are a few suggestions, not many, but essential.

 

For details, please see the followings:

1.    The introduction said that the strategic importance of cultivated land resources is prominent, and a subject can be added before it. Some countries with agricultural land shortages urgently need to control and use the cultivated land of other countries for agricultural production.

2.    At the beginning of the fourth section, referring to the current situation of China's overseas investment projects, it is suggested that the main distribution areas of investment projects should be ranked according to which indicator, which indicator or what indicator system should be used for the success rate, according to the contracted area, production area, number of projects put into production?

3.    In section IV, referring to spatial correlation self-analysis, it is suggested to add which regions have significant agglomeration effects of successful and failed projects after the paragraph.

4.    It is suggested to add the results analysis of the 11 indicators in Table 6 when writing the influencing factors in Part V. The existing articles do not specifically include all indicators in the analysis paragraphs.

5.    It is suggested to add some general words about the distribution characteristics in front of the influencing factors in the discussion section.

6.   I suggest you shorter your title, it is a little bit wordy. 

 

Again, I have a high comment on your contribution.

 

The upon-revision recommendations are helping this manuscript be more readable for readers.

Author Response

Response to Reviewer 2 Comments

1.The introduction said that the strategic importance of cultivated land resources is prominent, and a subject can be added before it. Some countries with agricultural land shortages urgently need to control and use the cultivated land of other countries for agricultural production.

I am very grateful to the reviewers for their comments. I agree with this point, so I have added the subject “Moreover, some countries with agricultural land shortages urgently need to control and use the cultivated land of other countries for agricultural production, and then ship the food produced back home to supplement their supplies.” before “the strategic importance of cultivated land resources is prominent”.

2.At the beginning of the fourth section, referring to the current situation of China's overseas investment projects, it is suggested that the main distribution areas of investment projects should be ranked according to which indicator, which indicator or what indicator system should be used for the success rate, according to the contracted area, production area, number of projects put into production?

I am very grateful to the reviewers for their comments. The paper does lack an explanatory note on this issue, so I have added further analysis at the end of the second paragraph of Part IV, which reads “It can be seen that the contracted arable land area may not always be placed into production, and the number of projects placed into production does not fully reflect the actual arable land area placed into production. Therefore, in determining which areas are suitable for investment, we should focus on the arable land area placed into production in the region, so that we can better determine the potential for successful investment in the region.”

3.In section IV, referring to spatial correlation self-analysis, it is suggested to add which regions have significant agglomeration effects of successful and failed projects after the paragraph.

I am very grateful to the reviewers for their comments. I have added Figure 1 after the paragraph and illustrated which regions have significant clustering effects on successful and failed projects, which reads "Combining Table 3, Table 4, Table 5 and Figure 1, it can be seen that the clustering effects of both successful and failed projects are most significant in Africa, where successful projects are concentrated in Liberia, Mali, Sudan, etc., and failed projects are concentrated in Congo, Madagascar, Zambia, etc.; the successful projects in Asia are mainly concentrated in Laos and Myanmar, and the failed projects are mainly concentrated in Cambodia and Indonesia; most of the failed projects in Europe are concentrated in Russia."

4.It is suggested to add the results analysis of the 11 indicators in Table 6 when writing the influencing factors in Part V. The existing articles do not specifically include all indicators in the analysis paragraphs.

I am very grateful to the reviewers for their comments. I have added the analysis of non-significant variables after Table 6, which reads " The length of investment and type of investment purpose have positive and negative effects on project success, respectively, but neither is significant, probably because China's overseas arable land investment started late and is in its infancy, with a short period of investment. Moreover, at present, China's investment serves a single purpose, with most of the contracted arable land used for growing grain, so these two variables are not key factors affecting project success. In addition, the economic base of the host country, the degree of openness and the bilateral relationship with China do not have a significant impact on project success, because China's overseas arable land investment is resource-oriented and focuses mainly on the resource endowment, business environment and institutional quality of the host country, while the remaining variables do not have a large impact on project success. "

5.It is suggested to add some general words about the distribution characteristics in front of the influencing factors in the discussion section.

I am very grateful to the reviewers for their comments. I have prefaced the discussion section with some general terms about distributional characteristics, which reads "Since both successful and failed projects have significant clustering characteristics and are highly spatially correlated, it is necessary to explore which factors contribute to project success or failure.”

6.I suggest you shorter your title, it is a little bit wordy.

I am very grateful to the reviewers for their comments. I have shortened the title, the new title is “Spatial Distribution Characteristics and Influencing Factors of the Success or Failure of China’s Overseas Arable Land Investment Projects”.

 

Author Response File: Author Response.pdf

Reviewer 2 Report

1. It is of great practical significance for China to study the spatial distribution characteristics of overseas farmland investment projects and the factors influencing their success or failure.

2. In the "Summary" section, add data sources.

3. In the "Data sources" section, add detailed information about data sources, including but not limited to website address, database name, etc.

4. The part of "Result analysis" should include diagrams and tables to show the analysis process and dig deeper into it.

5. "Discussion" section. Based on the results analysis and existing research literature, 2-3 themes should be analyzed, discussed and deduced to provide the basis for the research conclusions.

6. After the juxtaposition of "policy suggestions" into "research conclusions", the suggestions are deepened.

7. The research sample is small, so it is suggested to supplement the insufficient research and the direction of follow-up research.

8. Check the text and grammar.

Author Response

1. It is of great practical significance for China to study the spatial distribution characteristics of overseas farmland investment projects and the factors influencing their success or failure.

I am very grateful to the reviewers for their comments and recognition. The purpose of my research on the spatial distribution characteristics of overseas farmland investment projects and the factors influencing their success or failure is to provide reference for optimizing the investment layout and improving the success rate of projects in China's later stage.

2. In the "Summary" section, add data sources.

I am very grateful to the reviewers for their comments and recognition. I have added the data source in the summary section, which reads “This study used data from the Land Matrix, KOF, World Bank, CEPII, UNCTAD and other databases to analyze the spatial distribution characteristics and factors influencing the success or failure of China's overseas farmland investment projects in countries along the "Belt and Road" project through spatial analysis and the Logit model.”

3. In the "Data sources" section, add detailed information about data sources, including but not limited to website address, database name, etc.

I am very grateful to the reviewers for their comments. I have added the details of the data source in the "Data source" section, which reads “The data of the arable land investment area, project characteristics, production status and other related data are all from the Land Matrix database (https://landmatrix.org/). The host country’s resource endowment, institutional quality, degree of openness and other related data are from databases such as the KOF Globalisation Index（https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html） and World Bank（https://data.worldbank.org.cn/indicator）. The geographical distance between China and the host country, the length of investment agreement sining, partnerships and other related data are, respectively, from the Centre for International Vision and Information Research, France（cepii.fr/cepii/en/bdd_modele/bdd_modele.asp）, the United Nations Conference on Trade and Development，UNCTAD（https://comtrade.un.org/data/）and the website of the Ministry of Foreign Affairs of the People's Republic of China（www.gov.cn/guoqing/2005-06/02/content_2582743.htm）. ”

4. The part of "Result analysis" should include diagrams and tables to show the analysis process and dig deeper into it.

I am very grateful to the reviewers for their comments. I have added Figure 1 at the end of Part IV and illustrated which areas have significant clustering effects on successful and unsuccessful projects, which reads "Combining Table 3, Table 4, Table 5 and Figure 1, it can be seen that the clustering effects of both successful and failed projects are most significant in Africa, where successful projects are concentrated in Liberia, Mali, Sudan, etc., and failed projects are concentrated in Congo, Madagascar, Zambia, etc.; the successful projects in Asia are mainly concentrated in Laos and Myanmar, and the failed projects are mainly concentrated in Cambodia and Indonesia; most of the failed projects in Europe are concentrated in Russia."

5. "Discussion" section. Based on the results analysis and existing research literature, 2-3 themes should be analyzed, discussed and deduced to provide the basis for the research conclusions.

I am very grateful to the reviewers for their comments. I have analysed, discussed and derived the relevant topics in the “Discussion” section, which are revised below：

Second, according to the results of the nearest neighbor index, the Gini coefficient and the Moran index, both China’s successful and failed investment projects are highly correlated in space. For example, China has a number of successful projects in Laos, Vietnam and Myanmar, and these three countries are adjacent to each other, indicating that successful investment projects are likely to accumulate in certain regions. At the same time, similar clustering characteristics may exist for failed projects; for example, China has a number of failed projects in Mozambique, Zimbabwe and Zambia. This result is consistent with the conclusion reached by Han et al. [59], who also believe that China's overseas arable land investment projects have a good concentration in location and area, which requires China’s enterprises to focus on examining existing investment projects before investing in various countries, strengthen the analysis and research of successful and failed investment projects and select suitable investment areas based on the characteristics of enterprises. In particular, it is necessary to enhance the strength of enterprises, reduce the adverse impact of vicious competition in the international market and distorted reports in western media, such as those concerning "neo-colonialism" and "land grabbing", and enhance the continuity of current successful investment projects [6].

Finally, since both successful and failed projects have significant clustering characteristics and are highly spatially correlated, it is necessary to explore which factors contribute to project success or failure. Through the analysis, we found that the resource endowment of the host country and the contracted arable land area have a greater impact on the success of the investment project. The higher the resource endowment of the host country, the higher the investment success rate, reflecting that China's overseas arable land investment is a resource-oriented investment model, and abundant resources, as the main factor attracting investors in the host country, can not only expand the scale of investment but also improve the success rate of investment, which verifies the conclusions of scholars such as Deininger [4] and Hak et al. [25]. For example, Indonesia's agricultural resources are among the top 20 in the world, with high resource endowment, and there are a number of successful Chinese investment projects in the country; on the contrary, Cambodia's agricultural resources are at a moderate level, and the number of successful Chinese investment projects in the country is low, indicating that high resource endowment is the key element to guarantee the successful operation of investment projects. In addition, this study suggests that the contracted arable land area and the investment success rate show an inverted "U"-shaped relationship, which means that it is not the case that the greater the contracted area, the greater the probability of success. For example, China has assigned a great deal of arable land to Russia, but only a small part of the arable land has been placed into production, probably because, as the contracted area increases, this causes the Russian government to pay attention and panic, fearing that China will exploit their resources, and they will block China’s investment. However, interestingly, Zhou [37] believes that the investment’s cultivated land area and the success rate have a "U" curve relationship, which is contrary to the conclusion of this study. Borras and Franco [60] point out that the area invested is related to the number of farmers involved, and when the area is large, if the investor fails to meet the obligations, this can easily cause the farmer to revolt, which will lead to the failure of the project. However, when the area is further increased, the host government may reevaluate the transaction, and the company will also invest under the formal legal framework, which can help to improve the success rate.

6. After the juxtaposition of "policy suggestions" into "research conclusions", the suggestions are deepened.

I am very grateful to the reviewers for their comments. I have incorporated the "Policy suggestions" into the " research conclusions " and adjusted them so that the suggestions are deepened. Which reads “On the whole, China's performance in arable land investment in countries along the "Belt and Road" is not optimistic. At present, only 31.05% of the projects are in operation, and only 7.66% of the contracted arable land area has been placed into production. From the perspective of regional distribution, China has the largest share of arable land invested in production in North America, followed by South America, and the smallest share in Europe. Asia has the highest percentage of projects in production, while Oceania has the lowest percentage. In terms of the spatial pattern, the nearest neighbor indices of successful and failed investment projects were 0.385 and 0.321, respectively, and passed the significance test—that is, the successful and failed projects had the characteristics of a cohesive distribution, and the agglomeration degree of successful projects was higher than that of failed projects. The results of the Gini coefficient and spatial autocorrelation analysis also confirm this conclusion. Based on the results, the following policy suggestions are proposed. First, in the selection of regions for overseas arable land investment, Asian and American countries should be selected as much as possible. At present, the success rate and production area share of China's overseas arable land investment projects in Asian and American countries along the "Belt and Road" are among the highest, which is a good reference for future new investment sites. Second, it is necessary to fully examine China's existing investment projects in various countries before making an investment. Since the distribution of failed projects and successful projects in various countries has a significant agglomeration effect, the agglomeration area of successful projects should be considered when selecting a site, and one should avoid the agglomeration area of failed projects.

The results of the analysis of the factors influencing the success of the investment show that the characteristics of investment projects, the resource endowments of the host country, the business environment and the quality of institutions will all have an impact on the success of the projects. Among them, the impact of the contracted area on the success of the project has an inverted "U" shape, and a joint venture with the host country will reduce the success rate. Moreover, the host country's resource endowment, business environment and institutional quality all have a significant positive impact on the success of the project. In addition, the main influencing factors vary across regions, and joint ventures with host countries only have a significant negative impact on the performance of projects in Africa. The effect of the contracted area on the success of overseas arable land investment in Asian countries is consistent with the total sample, with an inverted "U" shape. In addition, there are significant positive and negative effects of the investment duration and type of investment purpose on the success of investment projects in Asian countries, respectively. Based on the results, the following policy suggestions are proposed. First, it is necessary to choose a host country with abundant resource endowment, a good business environment and institutional quality, and to collect relevant information through various channels to conduct a risk assessment of the host country investment. At the same time, the arable land area invested should be reasonable, and the investment plan should be formulated on the basis of fully considering the arable land area of the host country, the land system and the attitudes of the government and the people. Second, it is crucial to adopt differentiated investment models for different regions according to local conditions. For African countries, we should avoid joint ventures with local governments to avoid contributing to social conflicts and political party disputes; for Asian countries, we should adopt long-term investment plans and establish stable partnerships with countries for overseas arable land investment, and we should avoid complex and diverse crop cultivation types to reduce the risk of corporate management and rejection by host governments and citizens.”

7. The research sample is small, so it is suggested to supplement the insufficient research and the direction of follow-up research.

I am very grateful to the reviewers for their comments. I have added a new section at the end of the article to address the shortcomings of the study and the direction of future research, which reads “ In addition, this paper only analyzes the distribution characteristics of investment projects and the factors influencing project success in China, with a small sample, and the results cannot be compared with those of other countries. Future research will expand the scope to study the distribution characteristics of global overseas arable land investment projects and factors influencing project success, compare the differences between China and other countries, learn from the experience and advantages of other countries and contribute to the efficient development of China's overseas arable land investment.”

8. Check the text and grammar.

I am very grateful to the reviewers for their comments. I have referred the article to the appropriate institution to revise the language issues, and the revisions are too numerous to list here.

Author Response File: Author Response.pdf