Bilateral Trade Between China And Maritime Silk Road Countries; Analysis And Empirical Study From Triple Distance Vision

Trade is one of the most important pillars in China’s Maritime Silk Road strategy and becoming a main focus in academic research around the strategy. This strategy spans very widely, countries alongside this road were geographically apart, and the difference of cultural and institutional aspects are distinct, The bilateral trade development between China and the Maritime Silk Road countries are influenced not only by geographical distance, but also non-geographical obstacles constituted by cultural difference and institutional difference. Some researches attribute these obstacles as distances. This paper intends to conduct theoretical and empirical analysis on how geographical distance, cultural distance and institutional distance influence bilateral trades between China and the Silk Road countries.The existed analysis basically applied the method of traditional or extended gravity model, and common conclusion were reached. That is, geographical distance, cultural distance and institutional distance among two countries have significant negative effect on bilateral trade. However, the existed papers lack of a comprehensive distance perspective, and the methods applied for measuring cultural distance and institutional distance are the same, that is, Euclidean distance. This paper tries to use threshold regressive model to identify the threshold for distance to make its significance, and to achieve that, this paper uses factor analysis to distinct different countries’institutional distance.Based on the analysis of the current bilateral trade between China and the Silk Road countries, this paper finds that the bilateral trades keep sound momentum except the economic crisis in 2008. This paper make a mechanism analysis based on trade costs and trade risk vision.Through empirical study of bilateral trades between China and 27 countries from 2002 to 2014, this paper verifies that GDP、population significantly effect bilateral trade, and geographical distance and cultural distance as well as institutional distance also have significant effects on bilateral trade. At last, the threshold value of cultural distance and geographical distance are identified. When the distance is less than the threshold value, the significant effect will weaken.