The Impact of Cultural Distance on Export Duration of Chinese Enterprises: A Survey Based on GLOBE Project Data

Liu Hui; Qi Jianhong

doi:doi:10.16538/j.cnki.jsufe.2019.02.005

Summary

The high exit rate and short export duration have always been important issues puzzling Chinese enterprises’ exports, which not only lead to the inefficiency and instability of enterprises’ own exports, but also hinder the high-quality development of China’s exports. In order to explore whether the cultural distance between two countries is the cause of such high exit rate and short duration, this paper uses the survey data of GLOBE project to measure cultural distance, and divides it into cultural reality distance and cultural value distance. Then by adopting enterprises’ micro-data during 2000—2009, we test the impact and mechanism of cultural distance on the sustainability of Chinese enterprises’ exports. The results show that: First, both cultural reality distance and cultural value distance can significantly inhibit the extension of enterprises’ export duration, and because of the concealment and difficulty in obtaining the distance of cultural values, its influence on export survival is greater than cultural reality distance. Second, comparing with cultural reality distance, cultural value distance can affect export duration through the effect of export uncertainty. Third, based on the grouping test of homogeneous products and heterogeneous products, we find that the difference of demand preference is an important channel for the effect of cultural distance on exporters’ survival. The research in this paper not only helps to improve the export duration of Chinese exporters, but also helps us to understand the important economic significance of our country’s cultural " Going Global” strategy. The enlightenments to the government and enterprises lie in the following aspects: First, we should persist in promoting Chinese culture to " go global”, deepen other countries’ understanding of Chinese culture, and improve the soft power of national culture. Second, on the basis of knowing the cultural reality of importers, enterprises should strengthen the investigation of cultural values, and combine them to make more reasonable and sensible export choices. Third, we should take effective measures such as using trade fairs to reduce the degree of uncertainty brought by cultural distance in export and thus to improve the export duration of enterprises. Fourth, Chinese enterprises should fully investigate the demand preferences of destination countries for export products, so as to guide enterprises to adjust their sales patterns and product characteristics according to the culture of target countries, so that they can better adapt to the needs of overseas consumers, and alleviate the adverse impact of cultural distance on the survival of Chinese enterprises’ exports.