The Impact Of Cultural Distance To China’s Outward Direct Investment

With the implement of the strategy of "going out" in the start of the new century,China’s foreign direct investment(OFDI)began to expand dramatically.The rapid development of China’s OFDI has caused the wide attention.And the factors of cultural distance have attracted the attention of China’s scholars.Therefore,on the basis of studying the impact of cultural distance on China’s OFDI,this thesis further analyzes the characteristics of the influence of cultural distance.In this thesis,the author generalizes the existing relevant research literature on relationship between cultural distance and Chinese OFDI,and illustrates the space and the significance of further study in this paper.Then this thesis explains the positive and negative effects of cultural distance to China’s OFDI and the superposition of two kinds of effects from the perspective of theory.And then introduce the hypothesis of existence of the horizontal "S" type curve relationship between cultural distance and China’s OFDI: Namely,when cultural distance is small,it has a negative correlation to the development of China’s OFDI;when cultural distance is in a middle level,it has a positive correlation to the development of China’s OFDI;when cultural distance is large,it also has a negative correlation to the development of China’s OFDI.On this basis,in order to further analyze the characteristics of the influence of cultural distance,the thesis divides these countries and regions into the developed and developing economics according to the level of the development of these nations and regions,and then analyzes the effects of cultural distance to China’s OFDI in the different economics.And then according to particularity of the development of China’s OFDI and the lag of the positive effects of cultural distance,the author regards 2008 as a cut-off point then analyzes the differences on the effects of cultural distance to China’s OFDI in different periods.This thesis selects the panel data of China’s OFDI to 44 countries and regions in the period of 2003-2013 and then conducts a regression analysis.The author gets the following conclusions:(1)confirmed the existence of the relationship of horizontal "S" type curve between cultural distance and China’s OFDI.(2)At the same time the characteristics of the influence of cultural distance have been verified.They are the differences of different economics and periodically.The first set of results shows that the cultural distance hinders China’s OFDI flowing to the developing economics,and the relationship between cultural distance and China’s OFDI to develop economics performs horizontal "S" type curve.The second set of results shows that culturaldistance fully has an inhibiting effect to the development of China’s OFDI in the period of 2003-2008,and a horizontal "S" type curve relationship can be seen between cultural distance and China’s OFDI from the regression results in the period of 2009-2013.Based on the above research conclusions and combining with the current status of the development of Chinese OFDI,The thesis further puts forward some suggestions from the perspective of the characteristics of cultural distance for the further development of Chinese OFDI,such as getting the investment orientation,carrying out regional differentiation of investment strategy,strengthening cultural communication,enhancing cultural identity;and making full use of the international talents as the role of “cultural bridge”.