A Study Of The Impact Of Institutional Distance To The Agricultural Investment Model And Efficiency Between China And Southeast Asian Countries

Historically,China and south-east Asian countries share the similarity of geography and culture each other,the exchanges amoung different countries has lasted for longer time.During recent years,as the fast increase of agricultural production costs in China,different investors started going out and doing agricultural investment in south-east Asian countries,the major reason is the investors have seen the market opportunities between China and these countries,like the lower cost of labour,the rich natural resources for agriculture,and the agricultural products' market in China.This kind of comparative advantage really make Chinese investors and host countries both gain benefits from the agricultural investments.As the implementation of Chinese "One belt,One road" development strategy,as the increasing acceptance of foreign agricultural investment by the government and society in south-east Asia countries,as the strength of American "Back to Asia" development strategy,as the increasing conflict in southern China sea,the traditional "economic focus only" agricultural investment model has more and more problems and difficulties,especially when the Chinese investors found that we have the different religions with the south-east Asia countries,we have the different life objectives and life attitude each other,so even the Chinese investors strictly obey the formal regulations and laws in south-east Asia countries,but finally they found that the informal systems like religion,culture and social relations play the key role in the success of their investments.Or in other words,the Chinese agricultural investment has less consideration about the informal cultural systems in their investment activities,this has the negative influence to their investment and cause the criticize from western NGOs,so now it is very important to study the influence of informal social systems between Chinese and south-east Asia countries to the Chinese agricultural investment.This thesis takes Laos and Burmese as the example,to compare the institutional distance among China,Laos and Burma,to conduct the qualitative and quantative analysis of the influence for Chinese agricultural investment in Laos and Burma from the perspective of institutional distance.To interview 62 Chinese enterprises in Laos and 67 Chinese enterprises in Burmese by using questionnaire,the selected enterprises represent different types of agricultural investment in different regions in the two countries,to adapt the Logitech Model for investment model analysis,and the Least-square Method(OLS)for investment efficiency analysis.The findings from the study are:One is the institutional distance between two countries in theory is different from practice,for example,China and Laos share the similar formal system in theory,but in reality the Chinese agricultural investors always complain about the low efficiency of local government and unsupported financial system in two countries.Two is the Chinese investors usually prefer to establish the closed investment kingdom,because they feel the difficult and uncomfortable with the local community in institutional distance.Three is the understanding of institutional distance will influence the efficiency.For example,the Chinese style "gift given" CSR activities has less understanding about the demand of the local communities,so some times the CSR activities can not reach the maximum benefits,or can not reach the expected objectives of the local community.Four is the lack of some institutional practices will also influence the investment efficiency.For example,the Chinese agricultural investors have less experience to use the advocacy tool,to let the public understand their difficulties,or to let the local communities accept their investment and management style.The Chinese agricultural investor's voice always absent in the international world.In the future,in order to reach the sustainable development objective,the Chinese agricultural investment in south-east Asia countries can not only stay with the economic aspects only,it should go further to the informal institutional distance,to carful study the formal and informal institutional distance among countries,especially to analysis and understand the informal cultural system distance with each country.The policy suggestions are:First,The Chinese government should provide the institutional support to the Chinese overseas investment enterprises,which means to reach the agreement from the government level,to form the financial support system,to make the monitoring and evaluation standards clearly for agricultural investment.Second,the overseas Chinese investors should try to establish and accumulate their own institutional resources,they should start to understand,to negotiate,and to reach the agreement with the local stakeholders,to crate the micro institutional environment for its investment.Third,the Chinese government and investors should have the confidence to show and to prove the institutional strength in the international society,like investment based on win-win situation only,without political conditions,never try to interfere the political decision of other country,and let the Chinese style institutional strength is accepted by the international world.