Regional Culture,Corporate Style And Corporate Cross-Province Investment

Enterprise’s cross-regional investment are important manifestations of capital crossregional mobility at the micro Level.They are also important methods of regional diversification of enterprises,which are related to the allocation efficiency of capital elements and the spatial distribution of industries.Corporate off-site mergers and acquisitions have great significance for enterprises to improve capital investment efficiency,investment structure,and promote overall capital allocation efficiency,which is also an important way to promote a sustainable and healthy development of enterprises.China has a history of long-term local protectionism and market segmentation,which means it is very difficult for enterprises to conduct cross-regional investment.Studying the factors which affect enterprise’s cross-regional investment would have more important and practical significance under the circumstances.The research on cross-regional investment focuses on different research area from research on intra-regional investment.Cross-regional investment pays more attention to the impact of regional factors on corporate investment decisions,such as geographical distance between regions and market environment differences.In recent years,with the evolution of transportation,communication and other technologies and the rise of institutional economics,the research on cross-regional investment has gradually shifted from traditional regional resource conditions such as market size,labor cost,geographical distance and other factors to regional institutional environmental factors.In particular,the influence of regional culture on cross-regional investment in different places has received increasing attention from academia.The mainstream view is that the cultural distance between regions is not conducive to the investment of enterprises in different places.However,the relevant empirical tests have not yet reached a consistent conclusion.This might because in the research context of cross-border investment,the formal system and the informal system are often mixed and cannot be separated;or it may because the existing research is demonstrated from the perspective of the familiarity of the regional cultural environment and ignores the impact of business on regional cultural environment identity and matching.In fact,the enterprise’s familiarity with the cultural environment does not mean that it can adapt to and recognize the cultural environment very well.Even if the enterprise is in a familiar cultural environment,it may still generate additional communication,transaction costs and “combination” business risk due to the mismatch between the corporate style and the cultural environment.Therefore,when studying the influence of regional culture on the behavior of enterprise’s cross-regional investment,it is also necessary to consider the influence of the company’s own style.China’s institutional environment provides a good research environment for studying regional culture,corporate style and cross-regional investment.First,China has a large land and a long history,and the cultural differences in various regions are huge,which provides us with the possibility to study regional culture and enterprise’s cross-regional investment.Secondly,compared with western developed countries,China is still in the process of economic transformation.Due to the lack of perfect formal systems such as price and law,informal institutions such as culture often become substitutes and supplements to formal institutions and can generate significant influence on economic activities for enterprises.In the context of such a system,the study of regional cultural differences and enterprise’s cross-regional investment has more research significance and practical value.Thus,this paper takes China’s unique market environment and institutional environment as the research background and takes the newly-added subsidiaries of listed companies in China as the starting point of research,comprehensively examines the impact and mechanism to Chinese enterprises’ cross-regional capital flows affected by matching between regional culture and corporate style.Considering the cultural characteristics,cultural indicators and measurability of corporate style in China,this paper mainly tests the impact of the matching between the cultures and corporate styles of the three regions on the investment of enterprises in different places.Specifically,these three cultural dimensions are regional relationship culture,regional level culture,and regional opportunistic culture.Correspondingly,this article also established three company styles,namely the company’s relational style,hierarchical style and opportunistic style.This paper focuses on the impact of the matching between the three groups of corporate styles and regional culture on the cross-regional investment behavior of enterprises.First,this paper studies how the matching between regional culture and corporate style of the locality of the enterprise affects the tendency of the enterprise to invest in different regions.The results of this paper find that the higher the mismatch between corporate style and local culture,the more companies tend to invest in different regions.The results of the group test show that the mismatch between corporate style and local cultural environment has a major impact on the tendency of enterprises to invest in regions,especially in private enterprises and enterprises with low degree of financing constraints.The extended test found that the impact of this “local cultural matching degree” on the tendency of enterprises to invest in different regions mainly exists in the sample of the legal environment where the enterprise is registered and the sample of large-scale enterprises.The results of these studies show that when the enterprise does not match the cultural environment of the region,it may escape by means of cross-regional investment.Secondly,this paper examines how the degree of matching between corporate style and the cultural environment of the target investment region affects the location choice of the enterprise’s cross-regional investment,that is,where the enterprise invests.The test found that companies tend to invest in different places in a cultural environment that is more in line with their own style.The results of the group test show that the impact of the match between the corporate style and the cultural environment of the target region on the location choice of crossregional investment mainly occurs in private enterprises and enterprises with low degree of financing constraints.The extended test found that the impact of this “off-site cultural matching degree” on the location choice of the cross-regional investment of the enterprise mainly exists in the sample and large-scale enterprise samples with poor legal environment in the target area.The results of these studies show that when companies choose the location of investment in different places,they will consider the matching between the company’s own style and the cultural environment of the target area,and the company tends to invest in different places in a cultural environment that is more in line with their own styleFinally,this paper studies how the degree of matching between corporate style and the cultural environment of the target investment region affects the economic consequences of the cross-regional investment.The test results show that enterprises to invest in different places in a cultural environment that is more closely matched with their own characteristics will have higher capital allocation efficiency,and this phenomenon mainly occurs in private enterprises and low-financing enterprises.The extended test found that companies investing in a matching cultural environment also showed higher financial performance.These findings indicate that the degree of matching between corporate style and the cultural environment of the target investment region will affect the performance of the cross-regional investment.When investing in different places,enterprises should not only pay attention to the characteristics of resources and markets in the target area,but also consider the cultural environment of the area.Compared with the previous literature,the research in this paper may have the following innovations:(1)This paper first examines the impact of the match between corporate style and regional cultural environment on the enterprise’s cross-regional investment.(2)This paper examines and provides empirical evidence for the impact of regional relationship culture,regional level culture,and regional opportunistic culture on corporate investment behavior for the first time.(3)This paper provides new empirical evidence from the perspective of “escape” for the study of corporate cross-regional investment tendencies.The research in this paper has certain theoretical and practical significance.The theoretical significance of this paper is mainly:(1)Expanding the study of regional cultural factors affecting the investment behavior of enterprises in different places;(2)To some extent alleviate the endogenous problems of previous cross-border investment research scenarios;(3)Advance the research depth of research in the field of enterprise investment in different places;(4)Provide richer empirical evidence for regional culture and microeconomic theory.The practical significance of this paper lies in: adhering to the important instructions of General Secretary Xi Jinping on "strengthening the excavation and elucidation of Chinese excellent traditional culture".The research findings of this paper help to clarify the economic significance of regional culture and optimize the development path of regional culture.It is of great practical significance to actively exert regional cultural functions and,on the other hand,to promote inter-regional capital allocation and to avoid corporate investment value alienation and efficiency loss.