Cultural Distance and FDI: China Africa Perspective

HTML  XML Download Download as PDF (Size: 415KB)  PP. 382-399  
DOI: 10.4236/ojbm.2018.62028    1,004 Downloads   3,517 Views  Citations
Author(s)

ABSTRACT

Since the establishment of the Forum on China-Africa Cooperation back in 2000, Chinese investment in Africa rapidly increased. Almost two decades later, the economic partnership between China and African countries is facing both opportunities and challenges. This paper studies the impact of cultural distance on FDI, in the specific context of China-Africa cooperation. We employ generalized least squares regression analyses to estimate the impact of cultural distance on Chinese Outward FDI in 40 African countries from 2003 to 2015. Our results indicate that cultural distance has a significant negative impact on Chinese investment in Africa. Furthermore, distance in two of the four cultural dimensions has a bigger impact on FDI: Masculinity/Femininity and Uncertainty avoidance. We conclude that from China-Africa perspective, cultural distance creates additional barriers to Chinese investment.

Share and Cite:

Gagne, O. (2018) Cultural Distance and FDI: China Africa Perspective. Open Journal of Business and Management, 6, 382-399. doi: 10.4236/ojbm.2018.62028.

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.