Cultural diffusion is an important noneconomic determinant of tourism demand but has received less focus in the literature. This study seeks to address this gap by focusing on the impact of the Confucius Institute, an important institution of Chinese cultural diffusion, on inbound tourism to China. It is shown that the Confucius Institute positively contributes to the Chinese inbound tourism flows, even when the endogeneity of Confucius Institutes is considered. Moreover, the impact of the Confucius Institute on China’s inbound tourism has a lagged effect and regional heterogeneity. In addition, cultural distance is a mediating variable of the Confucius Institute on tourism demand. As cultural distance increases, the impact of the Confucius Institute on China’s international tourism flow first rises and then decreases.
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