An Investigation of Confucius Institute’s Effects on China’s OFDI via Cultural Difference and Institutional Quality

Chensheng Xu, Feng Yao and Fan Zhang
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Chensheng Xu: Guangdong University of Foreign Studies, School of Economics and Trade
Feng Yao: West Virginia University, Department of Economics

No 15-45, Working Papers from Department of Economics, West Virginia University

Abstract: This paper uses a panel data of China's outward foreign direct investment (OFDI) from 2004-2012 to investigate the influence of Confucius Institute on China's OFDI. We find that Confucius Institute, as a comprehensive platform for China's foreign cultural exchange, has a significant positive effect on China’s OFDI. Interestingly, the positive effect can be reduced with larger cultural difference and can be increased in host countries with lower institutional quality. Correspondingly, we find that Confucius Institute’s impact on China’s OFDI is more obvious in host countries with smaller cultural difference or lower institutional quality.

Keywords: Confucius Institute; foreign cultural exchange; outward foreign direct investment (OFDI); heterogeneous effect (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-10
New Economics Papers: this item is included in nep-cna, nep-cul and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wvu:wpaper:15-45

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