Cultural Diversity And Enterprise Internationalization

Outward Foreign Direct Investment(OFDI)is not only an important way for China to participate in the process of world economic integration,but also one of the main driving forces to ensure China’s sustainable economic development.Since China’s entry into WTO,OFDI has increased rapidly,and has become the third largest foreign investment country in 2013.After the Belt and Road Initiative in 2014,the Chinese government has been encouraged domestic enterprises to go abroad,actively carry OFDI and gain a place on the international stage.Through years of development,Chinese enterprises have indeed achieved the phenomenon of high flow and stock of OFDI,and become a real capital exporter.The traditional theory holds that OFDI is a process of seeking the best combination of its own competitive advantage and the location attraction of the host country and realizing its development strategy in the investment area.To some extent,the location advantage is homogeneous for all multinational corporations.Therefore,the previous theory of OFDI is mainly based on the competitive advantage of the parent company,that is,to obtain excess profits through the global utilization of "surplus resources".The rise of OFDI in developing countries that lack competitive advantage and the growth of China’s reverse investment need to be studied from a new perspective.Chinese traditional culture has a profound foundation and many kinds of culture.It is an ideal setting to study culture and corporate behavior.This paper attempts to explore the impact of the informal institution of culture on enterprises’ OFDI in a single country with the same institutional background,hoping to increase the deep understanding of the influencing factors of enterprises’ going out,and provide deep factors from the cultural level for the academic research on enterprises’ OFDI.This paper selects the dialect types of the city where the enterprise is located to directly measure cultural diversity,empirically investigates the impact of regional cultural diversity on enterprises’ OFDI and R&D internationalization by using the data of Ashare listed companies,then deeply analyzes the logical chain from the path of management talent internationalization and supply chain internationalization,and draws the corresponding research conclusions:First,the impact of regional cultural diversity on enterprises’ OFDI.On the whole,regional cultural diversity plays an important role in enterprises’ OFDI.Specifically,when the culture of the region where the enterprise is located is more diverse,enterprises tend to implement OFDI.Then,considering the characteristics of formal institution and industry,cultural diversity can better promote enterprises’ OFDI in areas with high marketization process and enterprises in high-tech industries.Furthermore,the net inflow of population and the work of executives in different places strengthen the positive role of regional cultural diversity in enterprises’ OFDI.On the one hand,cultural diversity areas will attract more population inflow,which is conducive to enterprises’ recruitment of diverse employees.The labor force flowing across regions has high cultural intelligence,which improves the probability of enterprises’ OFDI.On the other hand,the work of senior executives in different places has the ability to better adapt to different cultural environments.In the process of OFDI,enterprises are bound to comprehensively manage foreign and domestic related businesses.In the face of this situation,the experience of working in different places will make senior executives more able to deal with cross-cultural management and effectively promote subsequent operations.Finally,enterprises’ OFDI promoted by cultural diversity significantly improves enterprise performance.Second,as an important form of OFDI,R&D internationalization represents the quality of enterprise internationalization,so it is very necessary to study the impact of regional cultural diversity on Enterprise R&D internationalization.It is found that regional cultural diversity significantly improves the R&D internationalization behavior of enterprises,that is,in areas with cultural diversity,enterprises are more inclined to carry out R&D internationalization behavior.Considering the nature of property rights and enterprise heterogeneity,among non-state-owned enterprises,enterprises with large scale and small financing constraints,cultural diversity can better improve the internationalization of enterprise R&D.Further analysis shows that the absorptive capacity and risk-taking capacity of enterprises are conducive to the positive effect of cultural diversity on the internationalization of enterprise R&D.Finally,the internationalization of R&D promoted by cultural diversity significantly improves enterprise performance.Third,in the context of economic globalization,it is the future development trend for enterprises to go abroad.In this process,enterprises will face the complexity and uncertainty of the international market.At this time,the management with overseas background will become an advantage.In areas with cultural diversity,the characteristics of inclusiveness and openness will attract talents with international background,making local enterprises more likely to acquire international talents.Therefore,this paper explores the impact of cultural diversity and the internationalization of enterprise management talents.It is found that in areas with cultural diversity,the internationalization of management talents of local enterprises is more likely.When considering the nature of property rights,the differences between the South and the north and the characteristics of the industry,it is found that cultural diversity plays a more obvious role in promoting the internationalization of management talents in non-state-owned enterprises,southern cities and technical industries.Further analysis shows that the role of cultural diversity in promoting the internationalization of enterprise management talents will be more significant in more inclusive regions.Finally,the improvement of cultural diversity and the internationalization of management talents are indeed conducive to the implementation of OFDI and R&D internationalization.Fourth,in the context of economic globalization,international networks also play an important role in the "going out" of enterprises.Forming upstream and downstream relations with foreign enterprises is an important international network,which lays the foundation for enterprises to enter the international market.In areas with cultural diversity,the characteristics of inclusiveness,openness and innovation will attract foreign investors,making it more likely for local enterprises to form cooperative relations with international enterprises.The study found that in areas with cultural diversity,enterprises are more likely to form upstream and downstream supply chain relationships with foreign enterprises.When considering the nature of property rights,the differences between the South and the north and the characteristics of product market competition,it is found that the above relationship is more obvious in southern cities,technical industries and enterprises with fierce product market competition.Further analysis shows that cultural diversity promotes the internationalization of enterprise supply chain,which will be more significant in areas with more foreign investment.Finally,cultural diversity promotes the internationalization of enterprises’supply chain,which is conducive to the implementation of OFDI and R&D internationalization.