The Influence Of Cultural Distance On Bilateral Trade

Studies by many scholars have proved that cultural distance is an important factor that affects bilateral trade between the two countries.From the perspective of transaction costs,this paper uses Kogut,Singh,and Qi Jianhong's methods to construct the measurement of transnational cultural distance indicators,and uses bilateral trade data between China and countries along the “the Belt and Road” to do the empirical analysis of the influence on bilateral trade countries from 1997 to 2016.The result shows that the cultural distance between China and the Belt and Road countries has a long-term and significant negative impact on bilateral trade flows,and this impact has gradually increased during the sample period.That is,the smaller the cultural distance between the trading countries is,the more frequent the bilateral trade exchanges.The empirical results of the sub-dimension of cultural distance also prove the reliability of the research conclusions.In light of this,in the process of advancing "the Belt and Road" initiative,efforts should be made to optimize the "soft environment",gradually narrowing the cultural distance between China and countries along "the Belt and Road," and insisting on cultural advancement.Through strengthening cultural exchanges and cooperation,efforts should be made to resolve and eliminate mutual differences between China and countries along the Belt and Road,optimizing trade structure.