Research On The Impact Of Culture Distance On China’s Cross-border Portfolio Investment In Countries Along "The Belt And Road"

For a long time,China has imposed stricter regulations on capital,and with the rapid development of our economy and the further improvement of the financial system,China has gradually opened the door to capital,accelerated the pace of opening up,and vigorously promoted the "Belt and Road" initiative.As an important component of foreign investment,cross-border portfolio investment occupies an increasingly important position in the international capital market,and with the advancement of technology,culture has increasingly affected economic activities.Countries along the “Belt and Road” have different cultures,but the cultural differences between China and other countries vary greatly.It is important to study the impact of cultural distance on China ’s crossborder portfolio investment in countries along the “Belt and Road”.Firstly,this article sorts out the literature and theories that culture influences economic and financial cooperation and capital flow as the basis of research.The collection of literature and data confirms that our culture is closer to Southeast Asian countries than other countries along the “Belt and Road”,and conducts in-depth analysis of China ’s influencing factors on cross-border securities investment in countries along the “Belt and Road” to explore whether cultural distance is a significant factors affecting China’s cross-border portfolio investment and whether China is more inclined to invest in Southeast Asian countries whose culture are similar to ours.Secondly,using the four cultural dimension values proposed by Hofstede to analyze the cultural dimensions of China and the countries along the “Belt and Road”,and using the KSI index to analyze the cultural distances and characteristics between China and these countries,we can find Southeast Asia,whose culture is similar to ours,the cultural distance between these countries and China is smaller than that of other countries along the “Belt and Road”.Analyzing the current situation of China’s cross-border portfolio investment,China’s cross-border portfolio investment is unevenly distributed among countries,and compared with other countries along the "Belt and Road",China is more inclined to make cross-border portfolio investments in Southeast Asian countries.Finally,40 countries along the “Belt and Road” are selected as research samples,and the panel random effect model is used to analyze the influence of cultural distance on cross-border portfolio investment in countries along the “Belt and Road”.Set dummy variables to study whether China prefers to invest in cross-border portfolio in Southeast Asian countries that are similar to our culture,and analyze the impact of cultural distance on cross-border portfolio investment in countries along the “Belt and Road”.Empirical studies have found that China is more inclined to invest in cross-border portfolio investment in Southeast Asian countries whose culture are similar to ours,and the increase in cultural distance has a negative effect on cross-border portfolio investment,especially for debt securities.At the same time,the market size and the level of development can also promote the increase of investment scale.