Influence Of Cultural Distance On Import And Export Trade Of China

There are many factors affecting the trade flow,such as the geographical distance and the scale of economy.But cultural distance also affects the foreign trade.The previous studies have shown that cultural distance has a significant impact on foreign trade.However,in the direction of influence,they have not got the accordant conclusion.So does the cultural distance affect theforeign trade?In this paper,according to the research of WVS,25 countries(regions)in different cultural communities are selected as samples.Based on the analysis of the current situation of China’s foreign trade,we found that:China’s foreign trade is dependent on a few countries,and our trade with Confucian communities is in a high volumes.This paper empirically testifies the above supposition using the export and import data of China and sample countries(regions)for the period 1995-2009.The econometric model is divided into two categories to analyze the impact of cultural distance on China’s foreign trade.The first model is designed by setting cultural distance as a whole explanatory variable.The writer measures the cultural distance by drawing lessons from Kogut et al(1988)and Jianhong(2012).Then we examine the impact after controlling for geographical distance,the scale of economy,population and and other variables.The second model is based on the cultural dimension theory of Hofstede(1980),and replaces the cultural distance to six cultural dimensions.The conclusions are as follows:Firstly,the cultural distance has a negative impact on China’s foreign trade,and this impact on import trade is greater than export trade.Secondly,the negative impact of cultural distance onis greater than the geographical distance.Thirdly,the distance of the six cultural dimension has a complex impact on China’s foreign trade.In order to promote the smooth development of China’s foreign trade,we should narrow the cultural distance by disseminating Chinese cultures,understanding foreign cultures and improving the level of trade facilitation.