Impact of Multidimensional Distance on Financial Cooperation: A Case Study of China and Neighboring Countries

Financial cooperation is an important way to promote regional cooperation for high-quality development. In the process of deepening financial cooperation, cooperation faces many external influences due to the political, economic and cultural differences of different countries. To achieve the United Nations Sustainable Development Goals, such as poverty eradication and ensuring sustainable consumption and production models, we propose a novel way to takes the multidimensional distance of countries and financial cooperation as the research objects to explore the influence mechanism of differences on financial cooperation between China and neighboring countries. Taking China and Southwest neighboring countries as the research object, the financial cooperation events are assigned quadratic values. Quantitative analysis of the level of financial cooperation among countries by using the vertical and horizontal sliding scale method to measure the financial cooperation index among countries. The political, economic, financial, and cultural dimensions of distance between countries are taken as important factors affecting financial cooperation, and the effects of each dimension of distance on financial cooperation are examined separately and tested for robustness and heterogeneity. The results of the study found that multidimensional distance plays a driving role in China's financial cooperation with its southwestern neighboring countries, with cultural distance having the most significant impact on the level of financial cooperation. In addition, the results of the heterogeneity test conclude that the effect of multidimensional distance on financial cooperation in the presence of temporal and spatial heterogeneity. These findings are applicable to Policymakers who need to design financial cooperation strategies tailored to the specific temporal and spatial contexts, adapting them to the unique characteristics of the region.