How Do Cultural and Institutional Distance Affect China’s OFDI towards the OBOR Countries?

Zhang Lin () and Xu Zheqian ()
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Zhang Lin: Shanghai University of International Business and Economics, Boshi Building Room 303, 1900 Wen Xiang Road, Songjiang, Shanghai 201620, PR China
Xu Zheqian: Shanghai University of International Business and Economics, Boshi Building Room 303, 1900 Wen Xiang Road, Songjiang, Shanghai 201620, PR China

TalTech Journal of European Studies, 2017, vol. 7, issue 1, 24-42

Abstract: In order to examine the impact of cultural and institutional distance on China’s OFDI towards the One Belt, One Road (OBOR) area, the paper selects 28 countries along The Belt and Road. The empirical results using panel data from 2006-2014 indicate that institutional distance is negatively correlated with China’s outward foreign direct investment (OFDI). At the same time, cultural distance interacts with bilateral trade, resulting in a “benefit of foreignness” effect.

Keywords: cultural distance; institutional distance; OBOR; OFDI (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:bjeust:v:7:y:2017:i:1:p:24-42:n:3

DOI: 10.1515/bjes-2017-0003

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