The Influence Of Cultural Distance On Trade Potential Between China And Countries Along The Belt And Road

The countries along the "Belt and Road" are important trading partners of China,involving a large number of countries at different stages of development and cultural differences between countries,which makes China’s trade with countries along the Belt and Road is bound to encounter problems caused by cultural differences.This thesis will investigate the impact of cultural distance on the trade potential of China and the countries along the Belt and Road,and provide ideas for the better development of China’s trade with the countries along the route.This thesis firstly defines and measures cultural distance by combining previous research results at home and abroad,and analyzes the influence mechanism of cultural distance on trade volume by combining Transaction Cost Theory and Means-End Chain Theory.Secondly,we use the improved KS index to measure cultural distance,and remove one of the dimensions separately to construct the cultural distance index between China and these Belt and Road countries.Then,the Extended Trade Gravity Model and the Generalized Least Squares Method are used to analyze these indicators econometrically,based on which trade potential simulations are conducted and the results are interpreted.The results of the cultural distance measurement show that the cultural gap between China and most of the countries along the Belt and Road is small in the power distance dimension,individualism versus collectivism dimension,and indulgence versus restraint dimension,while the three dimensions of masculinity versus femininity,uncertainty avoidance,and long-term versus short-term orientation have a significant impact on the relationship between China and different countries along the Belt and Road.The three dimensions of masculinity and femininity,certainty avoidance,long-term orientation versus short-term orientation have different effects on the cultural distance between China and different countries along the Belt and Road.The results of the trade attraction model show that the cultural gap between the power distance dimension and the individualism-collectivism dimension hinders bilateral trade flows;the cultural gap between the masculinity-femininity dimension,the uncertainty avoidance dimension,and the long-term versus short-term dimensions boosts bilateral trade flows.The results of the analysis of trade potential show that cultural distance in the uncertainty avoidance dimension promotes trade between China and Thailand;cultural distance in the long-term orientation and short-term orientation dimensions inhibits trade between China and these countries.Finally,the research results are summarized and targeted policy recommendations are proposed: narrowing the cultural gap in the power distance dimension and the individualism-collectivism dimension;increasing trade in products with larger cultural gaps in the masculinity-femininity dimension,the uncertainty-avoidance dimension,and the long-term orientation and short-term orientation dimensions;selecting different products for trade according to different countries;promoting the construction of free trade zones and the signing of free trade agreements;and actively searching for new products.