Research On The Influence Of Cultural Factors On The Location Of China's Foreign Direct Investment

The continuous improvement of China's economic strength has enhanced the competitiveness of Chinese companies in the international economy and promoted the rapid growth of China's foreign direct investment.According to the United Nations Conference on Trade and Development(UNCTAD)World Investment Report 2017,China's foreign direct investment stocks increased by $451.65 billion compared with the end of last year,reaching $1809.04 billion,ranking first in the world in terms of global stock rankings.But,the failure of a series of Chinese companies to make acquisitions,acquisitions and investments overseas shows that China's foreign direct investment is not aware of the external risks,especially in the cultural environment of the host country.So,it is of great significance to study the influence of cultural factors on the location of China's foreign direct investment.It can enrich the research content and related theories of international direct investment,and on the other hand,it can provide theoretical conduction for how Chinese enterprises can rationally use cultural differences to promote the development of overseas direct investment.This paper first reviews the relevant theories of culture and foreign direct investment,and then introduces the status and characteristics of China's foreign direct investment location distribution,and use relevant cases to analyze the positive and negative impacts of cultural factors on China's foreign direct investment activities from the enterprise level.Then this paper takes China's direct investment in 81 countries and regions as the dependent variable from 2006 to 2015.The six cultural dimensions of Hofstede are used as independent variables to construct the gravity model for empirical test,and quantitative analysis of the impact of cultural factors on the location choice of China's foreign direct investment.The research results show that the cultural dimensions are different,and the impact on China's foreign direct investment is also different.For example,individualism/collectivism has a positive effect on China's foreign direct investment,and uncertain evasion has hindered China's foreign direct investment.Finally,based on the above analysis,this paper draws the corresponding conclusions and puts forward relevant suggestions on how to better promote Chinese enterprises' overseas direct investment from both the enterprise and government levels.