Cultural distance, friendship cities and production rates of contracted arable land in China’s overseas arable land investment

Distância cultural, cidades amigas e taxas de produção de terra arável contratada nos investimentos de terra arável no exterior da China

ABSTRACT:

Based on the data of China’s overseas arable land investment in 47 countries along the “Belt and Road”, the Tobit model is used to analyze the effects of cultural distance and friendship cities on the production rates of contracted arable land in China’s overseas arable land investment. This study provided theoretical basis and empirical support for promoting China’s agricultural “going abroad” and improving the production rates of contracted arable land in China’s overseas arable land investment. The results show that differences in cultural distance, power distance and the degree of uncertainty avoidance have significant positive effects on the production rates of contracted arable land in China’s overseas arable land investment, and differences in individualism have a significant negative effect on the production rates. Friendship city has a positive but insignificant effect on the production rates, meanwhile, it also weaken the positive impact of cultural distance on production rates of contracted arable land in China’s overseas arable land investment. The proportion of joint ventures with host country, the economic level and institutional environment of the host country will all have an impact on the production rates. Finally, recommendations are proposed to promote the production rates of contracted arable land, such as focusing on the positive role of cultural distance, establishing friendship cities, and investing host countries with high potential precisely.

Key words:
cultural distance; friendship cities; overseas arable land investment; production rates