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Influence of Cultural Distance on Chinese Outward Foreign Direct Investment

In: Emerging Economies and Firms in the Global Crisis

Author

Listed:
  • Rian Drogendijk
  • Katarina Blomkvist

Abstract

Since 2005, Chinese outward foreign direct investment (OFDI) has shown a striking positive trend, and today China is the main foreign investor in countries like Australia and South Africa (Evenett, 2009). This has triggered an increased interest among scholars and others to understand this development, and several studies have been performed to describe the trend and explain Chinese OFDI (Deng, 2004; Sauvant, 2005; Buckley et ah, 2007, 2008; Morckef ah, 2008; Voss, 2011). Although previous works indicate the potential role of culture and cultural differences for the internationalization of Chinese firms (e.g. Voss, 2011), a proper test of this explanatory factor has not been done. In this chapter, we test whether cultural distance (cf. Kogut and Singh, 1988; Hofstede, 2001; Drogendijkand Slangen, 2006) explains the investment behavior of Chinese companies.

Suggested Citation

  • Rian Drogendijk & Katarina Blomkvist, 2013. "Influence of Cultural Distance on Chinese Outward Foreign Direct Investment," Palgrave Macmillan Books, in: Marin A. Marinov & Svetla T. Marinova (ed.), Emerging Economies and Firms in the Global Crisis, chapter 7, pages 154-178, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-27747-3_7
    DOI: 10.1057/9781137277473_7
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