Cultural Distance and its Asymmetric Effect on the Choice of Entry Mode

Cultural distance;Cultural dimensions;Cultural distance asymmetry;Entry mode;658

경영대학 경영학과 ;

University:서울대학교 대학원

关键词: Cultural distance;    Cultural dimensions;    Cultural distance asymmetry;    Entry mode;    658;   

Others  :  http://s-space.snu.ac.kr/bitstream/10371/137283/1/000000146519.pdf

美国|英语

来源: Seoul National University Open Repository

【 摘 要 】

Cultural distance construct has been widely used as a predictor of a firm’s entry mode choice in international business studies. However, the construct is criticized to be inaccurate in capturing cultural differences between different countries as over aggregation of cultural dimensions could lead to false readings regarding meaningful differences among different cultural dimensions. This study purports to test the influence of cultural distance on entry mode by using alternative measurement of cultural distance with transaction cost explanations. As a departure from conventional conceptualization and measurement of cultural distance, cultural distance’s asymmetrical effect is tested to investigate whether positive and negative differences between home and host country culture could indicate different probability of a firm’s choice of entry mode. To test asymmetric effect of cultural distance on entry mode choice, Hofstede’s cultural dimensions were measured individually in this research. To be specific, power distance, individualism, masculinity and uncertainty avoidance were employed to test culture’s asymmetric influence on a firm’s ownership structure strategy of foreign subsidiaries. Hypotheses were tested with a sample of 906 overseas subsidiaries of Korean MNEs (KOSPI listed manufacturing firms).Empirical results gained from binomial logistic regression confirm that out of four cultural dimensions employed in this article, cultural distance of individualism has an impact on a firm’s choice of entry mode.