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Confucius Institute’s effects on international travel to China: do cultural difference or institutional quality matter?

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  • Donald Lien
  • Feng Yao
  • Fan Zhang

Abstract

This article uses a panel data of China’s inbound tourist flows from 2005 to 2015 to investigate Confucius Institute (CI)’s influence on China’s tourism. We find that CI, as a comprehensive platform for China’s foreign cultural exchange, has a significant positive effect on China’s tourist flows. The effects of CI on China’s inbound tourism are transmitted through bridging cultural gaps and promoting Chinese language, which reduces psychic distance and transaction costs. CI also stimulates China’s inbound tourist flows via reducing information asymmetry caused by different levels of institutional quality. Interestingly, we find that the heterogeneous effects of CI on China’s inbound tourism depend on institutional quality, and the effects of CI to boost China’s tourists are more prominent in departure countries with larger cultural difference.

Suggested Citation

  • Donald Lien & Feng Yao & Fan Zhang, 2017. "Confucius Institute’s effects on international travel to China: do cultural difference or institutional quality matter?," Applied Economics, Taylor & Francis Journals, vol. 49(36), pages 3669-3683, August.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:36:p:3669-3683
    DOI: 10.1080/00036846.2016.1265078
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    Cited by:

    1. Wang, Hao & Han, Yonghui & Fidrmuc, Jan & Wei, Dongming, 2021. "Confucius Institute, Belt and Road Initiative, and Internationalization," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 237-256.
    2. Firat Demir & Hyeonjin Im, 2020. "Effects of cultural institutes on bilateral trade and FDI flows: Cultural diplomacy or economic altruism?," The World Economy, Wiley Blackwell, vol. 43(9), pages 2463-2489, September.
    3. Donald Lien & Feng Yao & Fan Zhang, 2018. "Confucius Institute's Effects on China's Higher Education Exports: A Perspective from Cultural Difference and Institutional Quality," Working Papers 18-04, Department of Economics, West Virginia University.

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