The Impact of Confucius Institute on Chinese Enterprises' Overseas M&A

Using the data on China's overseas merger and acquisition (M&A) in 135 countries which establish Confucius Institute from 2009 to 2016, this paper investigates the impact of Confucius Institute on Chinese enterprises' overseas M&A. First, our findings indicate that the cultural output of Confucius Institute facilitates China's overseas M&A. Generally, the more established Confucius Institutes a country has, the more frequently Chinese enterprises conduct overseas M&A in that country. Besides, the paper shows that Confucius Institute has a stronger role in facilitating overseas M&A in countries that are longer geographically distant. Finally, the results reveal that Confucius Institute' impact is more pronounced in developed countries than developing countries due to economic factors. The study further provides effective information for enterprise managers' overseas M&A, as well as provides reference for policy makers to make better use of cultural exports to promote China's economic development.