The “One Belt and One Road (OBOR)” initiative is one of the most important strategies for open development in China’s new historical period. This paper aims to investigate the impacts of China’s outward direct investment (ODI) on the institutional quality of the host countries along OBOR. Using an international panel data from 2003 to 2014, it finds that, firstly, China’s ODI exerts a positive effect on “control of corruption”, “government effectiveness”, “political stability”, “regulatory quality” and “rule of law”. China’s ODI not only promotes the institutional quality of host countries in the short term, but also improves the equilibrium of the institutional quality in the long run. Secondly, the institutional effects of China’s ODI, especially the effect on “government effectiveness”, “regulatory quality” and “rule of law”, are stronger in the countries with relatively richer natural resources, which helps the resource abundant countries to get rid of the “resource curse”, In short, this paper helps us to have a better understanding of the institutional effects of China’s ODI, and also sheds light on the performance and future development of OBOR initiative.