When trade meets tradition: Unpacking cultural differences and their impact on China’s international trade
研究了2001-2021年间文化差异对中国与44个主要贸易伙伴贸易的负面影响，发现两者呈S形曲线关系，并指出贸易紧张可通过适应消费者偏好和心理因素来缓解。
Amidst renewed trade tensions and heightened uncertainty in global financial markets, this paper examines the impact of cultural differences on China’s international trade. Departing from majority of prior studies treating cultural disparities as static, we employ dynamic models to capture cultural differences over 2001–2021 with its 44 key trading partners. We incorporate Hofstede’s six cultural dimensions and apply both linear and non-linear models. Our findings show a consistent negative effect of cultural distance on China’s trade. The non-linear analysis uncovers a S-shaped curve relationship, highlighting the subtle influence of cultural differences confirmed by robustness tests in export and import trades. We argue that the impact of trade tensions can be lessened by aligning with the evolving nature of consumer preferences and psychological factors.