Research On The Influence Of Cultural Diplomacy On Chinese OFDI

Cultural diplomacy can narrow the gap between the two countries and is of great significance to the promotion of friendly relations between the two countries.At the same time,it also has an important impact on Chinese OFDI.This article selects International friendship city as the proxy variable of cultural diplomacy and uses the flow data of Chinese direct investment in various countries from 2003 to 2015.First,using Minimum two-way estimation to test out the International friendship city has a significant impact on Chinese OFDI.Second,this paper divides the countries studied into developed and developing countries to test whether the positive effect of cultural diplomacy on Chinese OFDI will have different effects due to the different levels of economic development of countries.The result of the study indicates that friendship cities have significant contribution to Chinese OFDI both in developing and developed countries.Finally,This paper uses the Propensity Score Matching and DID model to analyze the effect of cultural diplomacy on Chinese OFDI.Once again,This article verifies the role of International friendship city in promoting Chinese OFDI.At last,this article makes some relevant suggestions for promoting Chinese OFDI.