The Influence Of Cultural Distance And Institutional Distance On China’s Export Trade To Other BRICS Countries

Since the concept of "BRICS" was first proposed in 2001,the BRICS have shown great potential for development in both economic growth and foreign trade.In the context of the global economic slowdown and the Sino-US trade war,how to better carry out trade between China and emerging market countries,especially the BRICS,is of immense practical significance.As one of the important directions of China’s economic and trade development in the future,it is necessary to conduct an in-depth study of the trade influencing factors between China and other BRICS countries.The BRICS are scattered in four continents,the obvious cultural differences and institutional differences have become major features of the five countries and important factors that cannot be ignored in the trade development between China and other BRICS countries.Based on the existing research and the extended trade gravity model,this paper intends to carry out systematic theoretical analysis and empirical research on the influence of cultural distance and institutional distance on China’s export trade to other BRICS countries.The existing institutional distance research has obtained a consistent conclusion that the institutional distance has a negative impact on trade,but it has produced different conclusions in the study of cultural distance.By analyzing the influence mechanism of cultural distance and institutional distance on international trade,it is found that cultural distance mainly hinders trade development by affecting transaction costs and demand preferences,but the cultural characteristics caused by cultural differences also make trade flow growth possible.Through the analysis of the current trade situation between China and other BRICS countries,it is found that they have a good trade momentum and great trade potential,but there are also problems such as bilateral trade imbalances,insufficient trade links and constant trade frictions.In order to study the specific influence of cultural distance and institutional distance on China’s export trade to other BRICS countries,this paper conducts an empirical analysis of the intra-BRICS export trade and China’s export trade to other BRICS countries,then compares the results horizontally.Through empirical analysis of the trade data from 2001 to 2017,it is found that in addition to the influencing factors of GDP and geographical distance in the traditional gravity model,cultural distance and institutional distance also have certain influence on China’s export trade.The institutional distance has a significant negative impact on the intra-BRICS export trade and China’s export trade to other BRICS countries,that is,the institutional distance hinders the development of export trade.The cultural distance has hindered the intra-BRICS export trade.However,in the regression results of China’s export trade to other BRICS countries,the coefficient of cultural distance is positive.Although the impact is not significant,the P value is very close to the critical value.Further analysis of the six sub-dimensions of cultural distance shows that each sub-dimension has different impact on China’s export trade to other BRICS countries.As the cultural exchanges within the BRICS countries deepen,the cultural distance may have a significant positive impact on China’s export trade to other BRICS countries in the future.The research results show that in dealing with the BRICS countries,China should pay more attention to perfecting the institutional framework,focusing on institutional innovation,so as to create a favorable environment for China’s export trade and promote the healthy development of bilateral trade between China and other BRICS countries.At the same time,the influence of cultural distance cannot be ignored.How to further enhance cultural soft power and strengthen cultural exchanges,thus expanding the positive impact of cultural distance is also what we need to consider.