Document Type

Working Paper

Publication Date

2018

College/Unit

College of Business and Economics

Document Number

18-04

Department/Program/Center

Economics

Abstract

This article uses a panel data of international student flows to China from 2000–2014 to investigate Confucius Institute (CI)’s effects on China’s educational service exports. We find that CI, as a comprehensive platform for promoting Chinese language and cultural exchange, has a significant positive effect on China’s education exports. The effects of CI on China’s education exports are transmitted through promoting Chinese language, bridging cultural gaps, and reducing psychic distance. We further find that the effects of CI on China’s education exports are heterogeneous, depending on the level of cultural difference and institutional quality in the host country. The effects of CI to boost international student flows to China are more prominent in host countries with smaller cultural difference or lower institutional quality. Furthermore, the effects of cultural difference and institutional quality exhibit distinct patterns, hinging on the types of student flows.

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