Impact Of Institutional And Cultural Differences On China's Investment In One Belt And One Road Countries

Accompanied with the process of economic globalization,bring enterprises unprecedented opportunities for development,but relatively also makes enterprises face greater risks.Since President xi put forward the "One Belt And One Road�globalization strategy in 2013,these five years,the rapid growth of China's foreign investment but also encounter problems due to cultural and institutional differences,and makes some blocked in Chinese transnational enterprises in overseas investment.Domestic and foreign experts have done a lot of research on foreign investment.However,there are few studies on China's OFDI from the perspective of institutional and cultural differences,and there are even fewer studies centering on "One Belt And One Road"national panel data.Therefore,based on the existing relevant studies,this paper conducts theoretical and empirical analysis from the perspective of institutional and cultural differences.Through the analysis of China's direct investment development status,intercontinental distribution and investment proportion of each region in countries along the "One Belt And One Road"line,and the empirical study of the impact of institutional and cultural differences on the direct investment of "One Belt And One Road" countries,This paper finds that China's investment in "One Belt And One Road" countries is more likely to be in countries with similar institutions but large cultural differences.This is closely related to the types of enterprises that China invests in "One Belt And One Road"countries,these enterprises is relatively large,relatively mature management mode,can effectively utilize the diversity of culture producing products that meet the local people of heart,more international big enterprise operation management mode,can quickly into the different culture,use of cultural differences to complete the expansion of overseas market.Transnational enterprises often need a relatively stable institutional environment when they make "overseas investment,The economic,political and legal system environment of the host country is similar to that of China,which is beneficial for Chinese enterprises to integrate into the local market,reduce unnecessary costs such as rent-seeking,and facilitate Chinese enterprises to invest in "One Belt And One Road" countries.This paper reviews China's OFDI,At the same time,relevant literatures on the influence of cultural and institutional differences on OFDI in recent years are sorted out.It is found that there is no consistent conclusion in previous studies on the impact of institutional differences on OFDI.Some scholars believe that institutional differences will hinder the development of OFDI,Similarly,there is no consistent conclusion about the impact of cultural differences on FDI,Some scholars believe that cultural differences will inhibit the development of OFDI,while some scholars propose that the influence of cultural differences on OFDI presents a u-shaped curve.In a certain range of cultural differences,cultural differences will promote OFDI.This paper analyzes the influence of cultural and institutional differences on"One'Belt And One Road"OFDI,and points out that cultural differences will cause cultural conflicts and also affect transaction costs,thus affecting China's investment in "One Belt And One Road" countries.Moreover,institutional differences will lead to economic costs such as rent-seeking,which will affect transaction costs and China's outbound investment.This paper USES the data of China's direct investment in "One Belt And One Road"countries from 2008 to 2016,Study and analyze the impact of institutional and cultural differences on China's direct investment in "One Belt And One Road"countries.After a series of tests and model regression,Based on the panel data of China on the OFDI of 67 countries along the"One Belt And One Road"in 2008-2016,it was found that the cultural differences significantly promoted China's OFDI to those along the "One Belt And One Road",while the institutional differences significantly inhibited China's OFDI to those along the "One Belt And One Road".The above conclusions are robust to different model Settings,Moreover,the econometric model has passed a series of tests before formal regression,so as to guarantee the reliability of the research results in this paper.After the model regression,the endogeneity test of instrumental variables was conducted again to verify the reliability of the empirical results.By analyzing the empirical results of this paper,the author puts forward corresponding policy Suggestions on how to promote Chinese enterprises' investment in "One BeltAnd One Road" countries.Enterprises should make use of the cultural differences between China and "One Belt And One Road"countries.Diversified culture helps enterprises to produce diversified products,improve product diversity,seize the opportunity to explore overseas markets,win new markets for enterprises themselves,and improve the international influence of Chinese enterprises.At the same time,China should strengthen economic and legal cooperation with countries along the "One Belt And One Road"belt and road,Promote the establishment of"One Belt And One Road"trade zone,and strengthen the legal construction of countries along the "One Belt And One Road".All countries should strengthen legal cooperation and provide favorable institutional environment for enterprises.