The Effect Of Cultural Distance On OFDI Efficiency Of Chinese Enterprises

With the implementation of "One Belt and One Road"(OBOR)assumption,the Outward Foreign Direct Investment(OFDI)of Chinese enterprises to OBOR countries has been increasing.Under this realistic background,it is one of the important issues on how to improve the OFDI efficiency at this stage.While measuring the OFDI efficiency of Chinese enterprises in OBOR countries,this paper focuses on the impact of cultural distance on OFDI efficiency.Firstly,this paper theoretically summarizes the impact of cultural distance on OFDI based on literature review of China and Foreign.On the basis of weighing the effect of "Income of Foreigner" and "Liability of Foreigner",this paper puts forward the hypothesis,namely,the cultural distance has a positive influence on OFDI efficiency of Chinese enterprises.The greater the cultural distance is,the higher the efficiency of OFDI will be.Furthermore,the influence of each dimension on OFDI efficiency is further analyzed from Hofstede cultural dimension,which provides ideas for subsequent empirical tests.Secondly,a stochastic frontier gravity model based on panel data is established in this paper to calculate the OFDI efficiency of Chinese enterprises to the OBOR countries.The calculation results show that the OFDI efficiency of Chinese enterprises to OBOR countries along the routes is generally low,and the OFDI efficiency of private enterprises is slightly lower than that of state-owned enterprises.The scatter plot method is used to preliminarily confirm the positive correlation between cultural distance and OFDI efficiency.Thirdly,this paper uses the 965 investment records of 208 Chinese enterprises in countries along the OBOR from 2005 to 2017,this paper conducts an empirical test on how cultural distance affects the OFDI efficiency of Chinese enterprises through stochastic frontier analysis and technology inefficiency model.The regression results show that the influence of cultural distance on OFDI efficiency is significantly positive,that is the greater cultural distance between China and countries along OBOR,the higher the efficiency of OFDI,the root cause lies in "Income of Foreigner" stronger than "Liability of Foreigner".Chinese enterprises obtained the advantage development effect and the advantage exploration effect,due to cultural distance,in the process of OFDI.The result of grouping test further shows that the influence of cultural distance on different ownership enterprises is positive,among which the OFDI efficiency of private enterprises is lower than that of state-owned enterprises.Cultural distance will positively promote the improvement of OFDI efficiency whether before or after the proposal of OBOR,and this effect is even more significant after the implementation of the proposal in 2013.Finally,on the basis of summarizing the research conclusions of the paper,this chapter puts forward corresponding countermeasures and suggestions from both macro and micro perspectives,so as to maximize the OFDI efficiency of Chinese enterprises from the perspective of cultural distance.