Research On The Influence Of Institutional Distance And Cultural Distance On China’s Foreign Trade

In recent years,the unstable factors of China’s trade environment have increased: the foreign forms are complex,and the domestic economy is under downward pressure.The Chinese government needs to find new trade growth points on the premise of stable trade growth.Institutional economics theory holds that institution is one of the main sources of comparative advantage.Institutional factors and cultural factors,as endogenous variables affecting trade development,determine the scale and direction of national foreign trade development.Institutional distance and cultural distance have a complex and far-reaching impact on national foreign trade.According to the theory,the influence of institutional distance and cultural distance on trade is bidirectional,which not only inhibits the development of foreign trade,but also promotes the growth of foreign trade.In reality,the saying that "system determines trade" is increasingly recognized by scholars.Because system and culture,as the allocation mechanism of social resources,secretly and profoundly influence the trend of resources.Therefore,it is of certain significance to study the influence of China’s institutional distance and cultural distance on China’s foreign trade.In this paper,on the basis of combing relevant literature,the mechanism is analyzed,and the robustness model of least square method is established for research.According to the availability of data,this paper selects 113 countries and regions from 2004 to 2018 as research samples.This paper holds that the factors of development level of trading partner countries are related to institutional and cultural factors,and makes a comparative study by grouping the sample data.Then the results are compared to explore the influence of institutional distance,cultural distance and subdivided institutional distance on China’s foreign trade.Finally,the results show that:(1)On the whole,institutional distance and cultural distance will have a negative impact on trade.In terms of trade flow,China’s exports are less affected by institutional cultural differences than imports.(2)By regression of relevant variables,it is found that institutional distance and cultural distance are related to national economic development level,especially China’s institutional distance has a strong relationship with the development level of China’s trading partners.Therefore,the data samples are divided into groups,and the results show that cultural distance still significantly inhibits China’s foreign trade,while institutional distance has no significant impact on trade.(3)Divide the institutional distance into different types for research.The political system distance has a negative significantly impact on China’s foreign trade,while the legal system distance has a positive impact on China’s foreign trade.The economic system distance between China and developed countries promotes Chinese foreign trade,while the economic system distance between China and developing countries inhibits Chinese foreign trade.Finally,it is worth noting that China’s export trade is less vulnerable to institutional distance and cultural distance than import trade,which benefits from the maturity and perfection of China’s industrial system.On the basis of theoretical research and empirical analysis,this paper finally puts forward relevant policy suggestions from three angles.China should continue to deepen the reform of China’s relevant systems and provide a good business system environment for China’s trade development.China should strengthen cultural exchanges with other countries and guide the development of related cultural industries.China needs to evaluate foreign institutional systems and build a differentiated model.