Influence of Cultural Distance on Chinese Outward Foreign Direct Investment

Rian Drogendijk and Katarina Blomkvist

Chapter 7 in Emerging Economies and Firms in the Global Crisis, 2013, pp 154-178 from Palgrave Macmillan

Abstract: Abstract Since 2005, Chinese outward foreign direct investment (OFDI) has shown a striking positive trend, and today China is the main foreign investor in countries like Australia and South Africa (Evenett, 2009). This has triggered an increased interest among scholars and others to understand this development, and several studies have been performed to describe the trend and explain Chinese OFDI (Deng, 2004; Sauvant, 2005; Buckley et ah, 2007, 2008; Morckef ah, 2008; Voss, 2011). Although previous works indicate the potential role of culture and cultural differences for the internationalization of Chinese firms (e.g. Voss, 2011), a proper test of this explanatory factor has not been done. In this chapter, we test whether cultural distance (cf. Kogut and Singh, 1988; Hofstede, 2001; Drogendijkand Slangen, 2006) explains the investment behavior of Chinese companies.

Keywords: Host Country; World Trade Organization; Power Distance; Uncertainty Avoidance; Cultural Distance (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-27747-3_7

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DOI: 10.1057/9781137277473_7

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