The Impact of Cross-Cultural Communication on Firm’s OFDI: Evidence from China

Siqi Li

doi:10.54254/2754-1169/2025.LD25589

Advances in Economics, Management and Political SciencesOpen access

The Impact of Cross-Cultural Communication on Firm’s OFDI: Evidence from China

Research Article

Open Access

The Impact of Cross-Cultural Communication on Firm’s OFDI: Evidence from China

Siqi Li ^1*

¹ Ocean University of China

^*Corresponding author: lisiqi20040910@163.com

Published on 30 July 2025

AEMPS Vol.206

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-295-9

ISBN (Online): 978-1-80590-296-6

Download Cover

Abstract

Enterprise foreign direct investment (FDI) is closely linked to cultural ties between nations, and how to improve the efficiency of OFDI in the context of huge cultural differences has become an urgent problem for enterprises. Based on panel data from Chinese enterprises between 2013 and 2023, this study empirically investigates the impact mechanism of cross-cultural communication on OFDI. It is found that cultural communication significantly promotes corporate OFDI by enhancing host country’s cultural awareness and policy support, and this effect is more significant in cities with higher scientific and technological level and foreign investment concentration areas. Heterogeneity analyses show that the effect of cultural diffusion is stronger in SOEs and non-SOEs, revealing the importance of institutional advantages and governance structure. This study not only provides empirical evidence for the synergy between cultural communication and economic cooperation in the construction of the “Belt and Road”, but also makes suggestions for optimising enterprises’ overseas investment strategies.

Keywords:

Cross-cultural communication, Outward foreign direct investment (OFDI), Corporate internationalization.

View PDF

References

[1]. Zhang Runze, Qiu Peiyao, Lu Duan, et al. Shared Cultural Imprints and Enterprise Outward Investment [J]. South China Journal of Economics, 2023, (03): 76-93.

[2]. Xiang Zhiqiang, Ma Tingzi. Stratified Strategies for China's Cross-Cultural Communication Under Linguistic Distance [J]. Journal of Hunan University (Social Sciences), 2020, 34(05): 141-145.

[3]. Wang Jianxin, Li Ping, Yang Chen. U.S. Economic Policy Uncertainty and Location Choice of Chinese Enterprises' OFDI [J]. International Business Research, 2021, 42(05): 44-56.

[4]. Chen Sheng, Guo Yong. Host Country Business Environment and Home Country Outward Foreign Direct Investment: An Empirical Study Based on China's OFDI in BRI Countries [J]. Forum of World Economics & Politics, 2021, (03): 78-105.

[5]. Zhou Wei, Xu Zixuan, Zhao Xiaoyi, et al. Impact of Host Country Digitalization Level and Multidimensional Distance on China's OFDI [J]. Statistics & Decision, 2023, 39(21): 149-153.

[6]. Liu Xiaodi, Zhang Hong, Li Qingyang. Digital Transformation Empowering Chinese Enterprises' Outward Foreign Direct Investment: A Framework Analysis Based on Eclectic Paradigm Theory [J]. International Economics and Trade Research, 2024, 40(04): 86-101.

[7]. Wang Bijun, Song Ziwei. Home Country Government Support and Performance of Enterprise Outward Foreign Direct Investment [J]. International Economics and Trade Research, 2023, 39(03): 53-70.

[8]. Hua Jian, Tian Ye. New Trends in International Cultural Trade and China's New Approaches to Cross-Cultural Communication [J]. Journal of Shanghai Jiaotong University (Philosophy and Social Sciences), 2023, 31(04): 78-92.

[9]. Yu Guoming, Pan Jiabao. Paths and Strategies for Enhancing China's International Cultural Influence [J]. Media Observer, 2021, (04): 11-18.

[10]. Zhang Zengtian, Yao Zhenjiu, Lu Qi, et al. Can Executives' Overseas Experience Promote Corporate Green Innovation? [J]. Foreign Economics & Management, 2023, 45(08): 68-82.

[11]. Cheng Zhengzhong, Xia Enjun. Does Foreign Direct Investment Generate Spillover Effects on Development of High-Tech Zones? Evidence from Panel Data of 31 National High-Tech Zones [J]. Journal of Technology Economics, 2020, 39(03): 87-93.

References

[1]. Zhang Runze, Qiu Peiyao, Lu Duan, et al. Shared Cultural Imprints and Enterprise Outward Investment [J]. South China Journal of Economics, 2023, (03): 76-93.

[2]. Xiang Zhiqiang, Ma Tingzi. Stratified Strategies for China's Cross-Cultural Communication Under Linguistic Distance [J]. Journal of Hunan University (Social Sciences), 2020, 34(05): 141-145.

[3]. Wang Jianxin, Li Ping, Yang Chen. U.S. Economic Policy Uncertainty and Location Choice of Chinese Enterprises' OFDI [J]. International Business Research, 2021, 42(05): 44-56.

[5]. Zhou Wei, Xu Zixuan, Zhao Xiaoyi, et al. Impact of Host Country Digitalization Level and Multidimensional Distance on China's OFDI [J]. Statistics & Decision, 2023, 39(21): 149-153.

[7]. Wang Bijun, Song Ziwei. Home Country Government Support and Performance of Enterprise Outward Foreign Direct Investment [J]. International Economics and Trade Research, 2023, 39(03): 53-70.

[9]. Yu Guoming, Pan Jiabao. Paths and Strategies for Enhancing China's International Cultural Influence [J]. Media Observer, 2021, (04): 11-18.

[10]. Zhang Zengtian, Yao Zhenjiu, Lu Qi, et al. Can Executives' Overseas Experience Promote Corporate Green Innovation? [J]. Foreign Economics & Management, 2023, 45(08): 68-82.

Cite this article

Li,S. (2025). The Impact of Cross-Cultural Communication on Firm’s OFDI: Evidence from China. Advances in Economics, Management and Political Sciences,206,76-85.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: Digital Transformation in Global Human Resource Management

ISBN: 978-1-80590-295-9(Print) / 978-1-80590-296-6(Online)

Editor: Florian Marcel Nuţă Nuţă, An Nguyen

Conference website: https://www.icemgd.org/committee.html

Conference date: 26 September 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.206

ISSN: 2754-1169(Print) / 2754-1177(Online)

© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license. Authors who publish this series agree to the following terms:

1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.

2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.

3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open access policy for details).