Impact of cultural positions on FDI’s entry mode
Cross Cultural Management: An International Journal
ISSN: 1352-7606
Article publication date: 3 August 2015
Abstract
Purpose
The purpose of this paper is to study the influence of cultural positions on the choice of entry mode in foreign direct investment (FDI) – joint ventures vs wholly owned subsidiaries. The paper focusses on the impact of cultural positions along four cultural dimensions, as well as on the interactions between these positions and FDI’s contextual variables (i.e. linguistic differences).
Design/methodology/approach
A fuzzy set qualitative comparative analysis is performed on a data set of Spanish investments located in the European Union.
Findings
Existence of interaction effects among cultural positions along different dimensions, as well as between cultural positions and FDI’s contextual variables.
Research limitations/implications
Main limitations relate to the data set, as only FDIS carried out by big corporations and coming from a single country are considered.
Practical implications
Managers making decisions on the choice of entry mode must take into account the position relative to each individual cultural dimension, as well as its interaction with other cultural dimensions and FDI’s contextual variables, rather than just considering cultural distances (CDs) between countries.
Originality/value
First, focus on cultural positions (rather than CDs). It allows taking into account both the cultural characteristics of each party and their relative values along individual cultural dimensions. Second, development of a qualitative analysis that considers the contextual features of the investment.
Keywords
Citation
López-Duarte, C., Vidal-Suárez, M.M. and González-Díaz, B. (2015), "Impact of cultural positions on FDI’s entry mode", Cross Cultural Management: An International Journal, Vol. 22 No. 3, pp. 509-526. https://doi.org/10.1108/CCM-07-2014-0086
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited