Effect of the Host Law System on Foreign Direct Investment by Chinese Companies and the Mental Health of Workers

Abstract

Export processing zones (EPZs) in China have seen an increase in workforce migration due to foreign direct investment (FDI). Foreign direct investment (FDI) made by corporations based in China has expanded quickly. However, these investments have also been accompanied by a history of ignorance and carelessness, which has led to substantial worries over foreign investment. This is mainly the result of international investment companies ignoring the legal framework of the country in which they operate. However, it is impossible to prevent China's heavily polluting and resource-intensive industrial sector from receiving FDI. This could result in work environments with high occupational stress, such as the typical production line jobs in EPZs, which have been linked to negative mental health symptoms. This study investigates how the legislative framework of the host country (HC) influences the performance of foreign direct investments (FDI) made by Chinese companies to alleviate the mental stress experienced by employees. Initially, the datasets are gathered for this research and are standardized through normalization in pre-processing stage to eliminate the unwanted or repeated data. Then, the legal framework of the host country is analyzed with FDI. Moreover, "panel unit root test," "Hausman test," and "over-identification test" are employed for the empirical analysis. In brief, when host country resource endowment, technical level, ecological environment, union density, employer's mental health, and foreign investment experience improve, so will investment business performance. The host country's economic growth level and the legal system's soundness are positively correlated. A comparative analysis of the presented research and certain existing studies is also conducted. The findings of this research are examined and depicted in chart form using the Origin tool.