China's Export Trade And Foreign Direct Investment In West Asia And North Africa

In the new era,China's area studies serve the national strategy and provide intellectual support for the promotion and implementation of the “Belt & Road” initiative which focuses on the “five interconnection”(policy coordination,facilities connectivity,unimpeded trade,financial integration and people-to-people bonds).While every interconnection needs to build a multi-layered consultation mechanism between China and participating countries to overcome bilateral institutional barriers,as well as requires language and cultural exchange and communication to enhance mutual understanding and recognition.Exploring the impact of institutional distance between countries on their economic and trade cooperation is a consideration of formal institutional factors such as economic institution and political institution,which has become a relatively mature proposition in economics;the study of the impact of language,culture factors on economic and trade activities is a consideration of informal institutional factors such as language and values,which becomes a new proposition in the field of interdisciplinary research.At present,China's "Belt & Road" initiative has achieved remarkable results,and it will encounter a series of challenges in the future for the process of deepening and realizing,which makes it necessary for scholars to focus on new propositions around the key areas of “Belt & Road” in the field of area studies.Therefore,this study attempts to use linguistics and culture-related theories,combine with economics knowledge such as international trade and foreign direct investment(FDI),and adopts interdisciplinary research methods to empirically analyze the impact of informal institutional distance represented by language,values on China's economic and trade activities with countries in West Asia and North Africa.The existing researches generally ignore the role of informal institutional factors and focus more on formal institutional distance.It is often done by using cultural distance as an alternative variable,or by using the dummy variable method such as whether they are the same language or religion while ignoring the premise that they should have institutional attributes.So there are few studies which have discussed the informal institutional distance indicators.Therefor,the informal institutional distance and its conceptual clarifying,scientific measuring and situational localization is of practical significance to broadening relevant research topics.It is also found that most current domestic studies focus on the world's major trade countries or China's important trade target countries,few on regions or countries with similar cultural environments and geopolitical characteristics,and even rarer studies pay close attention to West Asian and North African countries.A hub which connects China and Europe and penetrates into the African continent,West Asia and North Africa provides the most convenient route for the "Maritime Silk Road" to Europe,and is at the intersection of the "Silk Road on Land" and the "Maritime Silk Road".As we all know that trade exports and FDI are important components of Chinese enterprises' "going global" strategy and an important part of China's cooperation with West Asia and North Africa under the "Belt & Road" initiative.Rich in petroleum and mineral resources,and highly complementary to China in terms of resources,capital,and market potential,West Asia and North Africa is also an important potential area for China's overseas investment as well as a key area to protect China's domestic energy security.Therefore,starting research from the region has certain implications for other regions on the “Belt & Road".The advantage of regional country research lies in the in-depth study of a country or region based on factors such as geography,language,history and culture.From this perspective,investigating the impact of informal institutional distance based on factors such as language and values on international trade activities between China and West Asia and North Africa is of great significance to China's development of the “Belt & Road” initiative.Starting from the concept of institutional distance,this study analyzes the dimensions of informal institutional distance indicators and their limitations through relevant researches at home and abroad;constructs an informal institutional distance indicator system based on language and value factors by integrating linguistics,culturerelated theories with authoritative supporting data sources and demonstrates the institutional attributes of this system;measures the bilateral differences by using the informal institutional distance system and its measurement methods with 24 West Asian and North African countries as the research sample;makes an empirical analysis on the impact of informal institutional distance on China's export trade and FDI in West Asia and North Africa by constructing an extended gravity model;and finally draws the following main conclusions:(1)informal institutional distance has a significantly negative effect on China's export trade in West Asia and North Africa;(2)informal institutional distance has a significantly negative effect on China's FDI in West Asia and North Africa;(3)China's FDI in West Asia and North Africa countries has both resourceseeking and market-seeking drivers;(4)the formal institutional distance also plays an important role in China's export trade and FDI in West Asia and North Africa.This study proposes suggestions on how to reduce the informal institutional distance between China and West Asia and North Africa as follows:(1)strengthening the popularization of Chinese language and deepening humanistic communications;(2)optimizing the Chinese language service system;(3)improving national language capacity;(4)cultivating interlcultural foreign language talents in the new era;(5)promoting area studies in the new era.The innovation of this study are as follows:In terms of perspective,this study selects West Asian and North African countries as the research sample from the topic of area studies and analyzes the impact of language and values on economic and trade activities from the perspective of informal institutional distance.In terms of research methods,interdisciplinary research methods are used involving linguistics,culturology,economics and other disciplines with knowledge in interdisciplinary fields such as linguistic economics,cultural economics,and institutional economics.In terms of research content,the study selects language and values as the core indicators of informal institutional distance by taking advantage of the foreign language disciplines,theoretically proves the institutional attributes of these two factors,and analyzes the difference and connection between cultural distance and informal institutional distance.In terms of data presentation,word cloud diagrams,geographical location diagrams,coordinate image and other visualization means are used to display the characteristics of the data.There are seven chapters in this study:Chapter one: the introduction.It includes the background of the research topic,the current status of domestic and international studies,the research significance,samples,methods,chapter arrangements and innovation.Chapter two: the theoretical framework.This chapter introduces the relevant theoretical basis and disciplinary background of informal institutional distance,explains related theories by means of comparison,analogy and association,and provides theoretical basis for the dimension of informal institutional distance and its indicator system construction.Chapter three: measurement of the informal institutional distance between China and the 24 West Asian and North African countries.This chapter mainly compares the measurement methods in the current research,selects the appropriate scheme to measure the bilateral language distance and bilateral values distance.Different from the general economic empirical analysis,there is a brief description of the general situation about language and culture in West Asia and North Africa before the results,as well as an analysis of the bilateral language distance and bilateral values distance with examples after the results.In addition,the source databases involved in the study are briefly introduced.Chapter four: an empirical analysis on the impact of informal institutional distance on China's export trade in West Asia and North Africa.With a brief analysis of the current status of China's export trade in West Asia and North Africa and its export environment,the conclusions are drawn through model construction,variable selection,descriptive statistics,multiple regression,and robustness test.Finally,the export potential of China in West Asia and North Africa is briefly analyzed.Chapter five: an empirical analysis of the impact of informal institutional distance on China's FDI in West Asia and North Africa.With a brief analysis of the current status of China's FDI in West Asia and North Africa and the its investment environment,the conclusions are drawn through model construction,variable selection,descriptive statistics,multiple regression,and robustness test.Finally,the investment potential of China in West Asia and North Africa is briefly analyzed.Chapter six: an empirical expansion research.This chapter introduces the informal institutional distance indicator system constructed by this research from the institutional distance perspective,empirically analyzes the impact of institutional distance on China's export trade and FDI in West Asia and North Africa through model construction,variable selection,descriptive statistics,descriptive statistics,and multiple regression,and further tests the effect of informal institutional distance.Chapter seven: the conclusion and enlightenment.This chapter reviews the entire research work,summarizes the important research conclusions,and puts forward the research implications on how to reduce the informal institutional distance between China and West Asia and North Africa.Finally,the deficiencies of this research are analyzed,and suggestions for further in-depth research are put forward.