The Impact of Cultural Institutes on International Tourism

It has been recognized that cultural institute programs that first started after World War II and aim to improve language familiarity and cultural awareness are beneficial for FDI and trade. We use gravity models to examine the impact from both the German Goethe-Institut and Chinese Confucius Institute (two large-scaled cultural institute programs) on tourism arrivals, a form of international trade. We find a positive impact on tourism arrivals from the Confucius Institute program but a negative impact from the Goethe-Institut program. In addition, both the Goethe-Institut and Confucius Institute programs help to reduce the impact of linguistic distance on international tourism.