Research On The Influence Of International Sister City Relations On China’s Foreign Direct Investment

Since the reform and opening up,China’s OFDI has developed rapidly and its influence has been continuously enhanced.In recent years,global economic and trade frictions have become severe,and OFDI has faced greater challenges.At the same time,urban diplomacy has gradually become an important part of China’s diplomatic strategy.As an informal people-to-people friendship or institutional arrangement,international sister cities can promote China’s OFDI by shortening cultural distance,strengthening bilateral trade and enhancing people’s goodwill.Therefore,it is of theoretical and practical significance to study the influence of international sister cities on OFDI.This thesis selects 2010 to 2019,138 countries establish the sister city relationships with China’s panel data as samples,using the international friendship cities represent informal diplomatic relations,on behalf of formal diplomatic ties with bilateral political relations,explore the international friendship cities on China’s OFDI,the influence mechanism and the influence of regulating effect of the impact of the bilateral political relations,The following conclusions are drawn :(1)international sister city relationship can effectively promote China’s OFDI and has passed a series of robustness tests.(2)The promoting effect of international sister city relationship on China’s OFDI shows certain heterogeneity in different types of countries.For non-Belt and Road countries,middle-income countries and high-income countries,international sister city relationship plays a better role.(3)From the perspective of intermediary effect,international sister city relationship can promote China’s OFDI by shortening cultural distance,strengthening bilateral trade,and enhancing public goodwill.(4)From the perspective of moderating effect,friendly bilateral political relations as formal diplomatic relations can to some extent weaken the promoting effect of international sister city relations on China’s OFDI.Based on the research conclusions,this thesis puts forward the following suggestions :(1)optimize the international sister city management mechanism.(2)Vigorously promote people-to-people and cultural exchanges based on international sister city relations.(3)Promoting investment development through international sister city relations.(4)Optimizing bilateral political relations based on international sister city relations.The innovation and marginal contribution of this thesis are mainly reflected in :(1)China’s OFDI is studied from the perspective of institutional theory,and the influence of international sister cities,as informal diplomatic relations or institutional arrangements,on China’s OFDI is discussed,which is a beneficial supplement to existing studies in terms of research perspective and depth.(2)Existing studies on the impact of international sister city relationship on China’s OFDI are not clear enough in the analysis of this impact mechanism.This thesis adopts the mediation effect model and selects three mediation variables to systematically explore its impact mechanism.(3)Most of the existing studies on the influence of bilateral diplomatic relations on China’s OFDI discuss the direct promoting effect of formal diplomatic relations on China’s OFDI,while this thesis takes formal diplomatic relations as a moderating variable to explore whether formal diplomatic relations can strengthen or weaken the influence of informal diplomatic relations on China’s OFDI.Therefore,the existing research is extended.