Research On The Influence Of Humanities Exchange On China’s Outward Foreign Direct Investment

In recent years,China’s ‘Going Out’ strategy has been continuously promoted and achieved remarkable results.And China’s outward foreign direct investment OFDI has ranked among the top three in the world for many years.However,China’s OFDI has also been questioned and criticized by many overseas regulators and public opinions.The reason for this distrustful and hostile thoughts is actually due to the huge differences in values,languages,religious customs and cultures between China and other countries in the world.In order to alleviate cultural conflicts,reduce the ‘hidden costs’ caused by cultural differences,and strengthen the understanding and recognition of Chinese culture,China has put the emphasis of international business on foreign humanities exchange.This paper reviews relevant studies and collects data from multiple sources.In the theoretical research,with the help of trade cost,cultural identity,political relations and product life cycle theories,it points out that humanities exchange promote the development of China’s foreign direct investment by enhancing bilateral trade,easing political relations and narrowing cultural distance.Meanwhile,in the empirical research,it forms a new evaluation system of humanities exchange with the index of people-to-people connectivity in the ‘Belt and Road’ initiative of Peking University,using the entropy method and quantifying the scores of humanities exchange as the core explanatory variables of the model.This paper also leverages on the investment attraction model to analyze the overall impact,influence mechanism and regional heterogeneity of humanities exchange on China’s OFDI,and uses four methods to test the robustness regression.The following conclusions are:(1)Humanities exchange can significantly promote China’s OFDI.(2)Bilateral trade,political relations and cultural differences play a significant moderating role in the process of promoting China’s OFDI through humanities exchange.(3)The influence of humanities exchange on China’s OFDI is heterogeneous,and it plays a more significant role in promoting foreign direct investment in countries with higher economic development level or in non-Confucian cultural circle.Based on these conclusions,this paper puts forward policy suggestions from improving the cooperation mechanism of humanities exchange,innovating the communicative forms of humanities exchange,optimizing the path of influence of humanities exchange and leveraging the positive effects of humanities exchange,so as to make better use of humanities exchange to promote the development of China’s OFDI.