Based on the digital competitiveness index, this paper investigates the impact of digital economy development of host countries of Chinese OFDI and its mechanism of action. Findings implicate that the digital economy has become an important location factor of host countries, and China tends to invest in countries with a higher level of digital economic development on the whole. In terms of the mechanism, the development of the host country's digital economy can positively influence the location choice behavior of China’s OFDI through accumulating domestic human capital and enhancing innovation capacity. Finally, in order to better promote China's international investment cooperation in the context of digital economy and achieve a higher level of opening up to the outside world, the following three research revelations are proposed as follow: first, to clarify the differences in the level of development of digital economy in each host country and optimize the layout of production links and outbound investment choices of enterprises; second, to vigorously promote the construction of infrastructure that is compatible with the development of digital economy and improve the existing institutional framework and other soft environments; third, to make full use of the new development brought by the digital economy in the host country.

Digital Economy, OFDI, Human Capital, Innovation Ability