the kogut and singh national cultural distance index time to start using it as a springboard rather than a crutch this counterpoint investigates the continued relevance of the 30 year old kogut and singh ks index of cultural distance ks was a seminal contribution highlighting the relevance of cultural differences in ib however since then simplistic replications of the original arguments and index have prevented us from progressing towards a better understanding of how cross national differences matter we discuss the mechanisms underlying the construct and how they relate to the algorithm data and its critiques we call for more theoretically informed approaches highlighting the underlying mechanisms and specifying which data and algorithms best capture those mechanisms in each research context

the interplay of national distances and regional networks private equity investments in emerging markets integrating social network theory with the literature on national distance we examine how the investment strategy followed by a private equity pe firm in an emerging market is affected by the interplay between two important types of national distances institutional and geographic and the firm s centrality in the regional syndication network covering over 5 000 investment transactions we use a dataset of more than 500 pe firms based in both developed and emerging markets targeting three emerging market regions latin america southeast asia and eastern europe from 1996 to 2011 the results show that depending on the level of centrality of pe firms in regional syndication networks institutional and geographic distances can have differing effects both in magnitude and direction on their investment strategies in emerging markets moreover these effects are contingent on whether the pe firm is from a developed market or an emerging market we conclude that different types of national distances can operate in dissimilar ways depending on 1 firm level factors defined at the regional level such as centrality in the regional syndication network and 2 the developed market or emerging market nature of the pe firm

the making of a construct lessons from 30 years of the kogut and singh cultural distance index the 30 year anniversary of kogut and singh s 1988 groundbreaking study that introduced the concept of cultural distance and its accompanying measure provides the opportunity to take stock of what makes for a good construct we organize our discussion around the issues of concept algorithm and data to clarify and gauge their contribution before highlighting the impact of their work more generally many of the challenges raised by critical observers focus on one of these three dimensions as there is value in looking systematically at the construct from concept to data we set out the argument of the index and discuss the validity of selected lines of criticism we identify a number of emergent and future directions for the conceptualization and measurement of cultural distance to facilitate the continuing advancement of work on international business

an overview of hofstede inspired country level culture research in international business since 2006 kirkman lowe gibson s 2006 jibs article summarized and critiqued international business research inspired by the most cited book in the field hofstede s 1980 culture s consequences international differences in work related values hofstede 1980 2001 they identified a number of issues in this research and offered several recommendations for improving it in the future thus laying a strong foundation for hofstede related work since 2006 in this commentary we assess kirkman et al s 2006 impact on the field our review shows that their ideas have informed and inspired their own and other scholars work and have led to significant progress in the way in which hofstede s framework has been used in international business in the last decade here we specifically focus on the country level culture studies and assess how research has implemented kirkman et al s three main recommendations to explore cultural dimensions beyond those introduced by hofstede to distinguish between country effects and cultural effects and to show not only if culture matters but also how much it matters in addition to the overview we provide a comprehensive test of these recommendations showing how they can be put into research practice underscoring the theoretical and empirical relevance of the original 2006 article our commentary concludes with additional ideas on further strengthening hofstede inspired research at the country level of analysis

capturing the role of societal affinity in cross border mergers with the eurovision song contest this paper demonstrates the effectiveness of voting bias in the eurovision song contest as a means of capturing societal affinity more than 180 million viewers from more than 40 countries watch the eurovision song contest every year and vote for their favorite songs societal affinity between participating countries leads to systematic bias in voting patterns as each song represents a country using cross border mergers as a proxy for international business exchanges we demonstrate how voting bias provides a simple freely available and dynamic means of capturing societal affinity between countries that complements other metrics of affinity and distance

towards a more balanced treatment of culture in international business studies the need for positive cross cultural scholarship the results of a content analysis of 1141 articles published in the journal of international business studies over a 24 year time period 1989 2012 reveal that a pervasive tendency exists in the international business ib literature towards emphasizing the adverse outcomes associated with cultural differences more than the positive effects we argue that this imbalance is not an accurate reflection of the reality of cross cultural contact in ib and that it has hindered our understanding of the processes and conditions that help organizations leverage the benefits of cultural differences in a wide range of contexts we offer several explanations for the predominance of the negative over the positive in theory and research on culture in ib and using a positive organizational scholarship lens couched in the context of march s 1991 exploration vs exploitation organizational learning framework highlight a complementary perspective namely the idea that cultural differences can be an asset not just a liability in a range of ib contexts we conclude by offering an integrative framework within which both positive and negative effects of cultural differences can be understood and provide a road map for future research on culture in ib

the casino model of internationalization an alternative uppsala paradigm forty years after the publication of the original uppsala model we revisit the empirical observations that inspired its conceptual development the empirical evidence we suggest invites the formulation of an alternative and complementary model of the internationalization process of the firm one that we have named the casino model of internationalization the casino model uncovers a number of new research issues pertaining to internationalization and to the nature of strategic decision making under conditions of environmental uncertainty and partial ignorance

phasing the operation mode of foreign subsidiaries reaping the benefits of multinationality through internal capital markets the lifetime of foreign equity partnerships is often limited research suggests that mncs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished this study shows that mncs may abandon their local equity partners to reap the benefits of multinationality as mncs gain a competitive advantage from leveraging resources across borders they will initially benefit from sharing ownership with a local firm to embed their foreign subsidiaries in the local environment and access local resources more effectively later they will benefit from taking over the local partner s equity share to better embed their subsidiaries in the parent organization and transfer locally accessed resources to the mnc s other locations moderated mediation regressions provide evidence of such practice in the context of cross border transfers of capital resources this strategy seems to work as a corollary of our model panel regressions suggest that sharing ownership with local firms in a host country with a capital resource advantage is associated with appropriating more capital resources from the local debt market while abandoning these partner firms later is associated with transferring more capital resources from this host country via internal capital markets to other parts of the mnc

beyond hofstede and globe improving the quality of cross cultural research journal of international business studies 2010 41 1259 1274 doi 10 1057 jibs 2010 41 overview of 41 8 hofstede and globe in cross cultural research while hofstede s work was not the first systematic study on crossnational cultures his seminal book culture s consequences international differences in work related values 1980 succeeded in putting cross cultural analysis at the forefront of international business ib research in a later paper he boldly asserted that the business of international business is culture 1994 1 despite the criticisms that have been voiced against his work see mcsweeney 2002 oyserman coon kemmelmeier 2002 hofstede s influence on the fields of ib and management is undeniable according to harzing s publish or perish citation index as of june 2010 there were over 54 000 citations to his work this is a remarkable record that attests to first the growing popularity of cross cultural research in light of continued internationalization of the world economy and second hofstede s personal impact on scholarly research this jibs issue brings together 10 articles on culture and ib all of which were submitted to the editorial team led by jibs editorin chief lorraine eden while the articles were independently submitted through the regular double blind reviewing process the decision to join them in one collection creates in effect a special issue on culture in international business research which the jibs editors hope will be widely read and cited by ib scholars in general terms the papers in this collection fall into one of two categories 1 articles and commentaries about conceptual and methodological issues associated with hofstede s oeuvre vs the global leadership and organizational behavior effectiveness globe project s cultural dimensions and 2 articles and perspectives that use culture and or cultural dimensions as well as the operational measurement thereof to explain differences in behavior and practices across countries the common feature of all these scholarly pieces is that they challenge particular assumptions often made too easily in conventional cross cultural research the first paper in this collection is a perspective written by franke and richey that cautions against questionable generalizations from small numbers of countries in international business research using statistical analysis to support their assertion franke and richey argue that in order to draw credible generalizations in ib a minimum of 7 10 countries must be used this is an important message researchers should never formulate strong conclusions about the impact of cultural dimensions on journal of international business studies 2010 41 1259 1274 2010 academy of international business all rights reserved 0047 2506

the globe debate back to relevance this is a critical summary review of the debate about the global leadership and organizational behavior effectiveness globe study in jibs and other journals between november 2006 and the present issue several contributors did not realize that globe used three essential constructs taken from my publications in a sense entirely different from mine values practices and organizational culture not recognizing the ensuing confusion they had no answer for the question in my 2006 review what did globe really measure if you do not know what you are talking about you can continue arguing for ever beyond the fuzziness of what is measured the debate leaves us with an even more fundamental question what is the use of the globe dimensions

cross border venture capital investments the impact of foreignness on returns against the background of the growing internationalization of venture capital vc investing this is the first global comparison of the returns generated by individual domestic and cross border deals we examine investments worldwide during 1971 2009 and find that cross border investments significantly underperform compared with equivalent domestic investments returns are negatively affected by geographic distances cultural disparities and institutional differences between the home and host countries returns on cross border and domestic deals also decline after the late 1990s international portfolio diversification and the saturation of domestic markets may explain why vc investors make cross border investments despite poor expected returns

beyond cultural distance switching to a friction lens in the study of cultural differences my 2001 article provided a critical review of one of the most popular constructs in international business and in the management and business literature as a whole namely cultural distance it listed various illusions implicit yet unsubstantiated and refutable assumptions that underpinned a construct set to capture the essence of cultural differences the paper questioned the validity of the measure the resultant findings obtained in such international business applications as foreign direct investment patterns sequence entry mode and performance and ultimately the wisdom of continuing the use of the measure and its underlying construct in this retrospective i review subsequent work that tested some of the original observations the impact the article has had and in particular how we can redirect research away from the static cultural distance paradigm toward the dynamic interaction of the actual entities that come into contact in international business

multinationals and corporate social responsibility in host countries does distance matter prior studies have found that foreign affiliates of multinational enterprises mnes suffer from liability of foreignness lof foreign affiliates may be able to improve their social legitimacy and overcome lof by demonstrating social commitment to host country constituents through corporate social responsibility csr if lof is positively related to the distance between the home and host countries and csr activities confer social legitimacy benefits on foreign affiliates we should expect csr activities and distance to be positively related however we argue that despite this potential motivation foreign affiliates from more distant home countries are in fact less likely to engage in host country csr our argument focuses on the ways in which distance affects the mne s willingness and ability to engage in csr abroad we also predict that host country csr reputation negatively moderates this relationship using community reinvestment act data for foreign bank affiliates from 32 countries in the united states over 1990 2007 we find strong support for our hypotheses the paper enriches our understanding of csr practices in mnes and of when and how mnes try to overcome legitimacy issues in host countries

whole country of origin network development abroad the support that networks offer during the internationalization process is well documented in the international business literature however this work has primarily focused on firm level networks while underappreciating the cooperative behaviors that may emerge among organizations in the pursuit of common network level goals to better understand these concerted and coordinated actions we engaged in a qualitative examination of two clusters of italian organizations abroad we observed that goal directed and governed networks emerged in these clusters bounded by their common desire to support italian firms internationalization this insight underlies our contributions to the international business and whole network literatures we offer a process model outlining the emergence of a particular type of whole network the country of origin network this process is much more distributed emergent and context dependent than previously theorized our model illustrates that network development involves the active and coordinated efforts of diverse actors working to create infrastructure that can be accessed by and shared between new and existing organizations our finding that both networks were governed utilizing a distinct but context appropriate governance structure provides new insight into how networks support internationalization furthermore it illustrates that whole network level support is distinct from but complementary to the firm to firm support highlighted in previous studies

the impact of culture on the strategy of multinational enterprises does national origin affect ownership decisions this paper tests the proposition that national origin affects the strategies of multinational enterprises by looking at the determinants of the choice they make between entering the united states through partially versus wholly owned subsidiaries we pool entries into the united states made by firms based in two countries japan and finland which differ both in their cultural characteristics and in their cultural distance to the united states after carefully controlling for the known firm and industry level determinants of subsidiary ownership strategies we find that cultural distance between the home base of the investor and the target country or perhaps political risk exerts a powerful influence on ownership of subsidiaries but cultural characteristics of the home base do not

solving the single country sample problem in cultural distance studies selecting appropriate samples in cultural distance research is vital to producing valid empirical results over 80 of empirical cultural distance studies use a sample comprised of either a single home country with varying host countries or a single host country with varying home countries when difference scores are used in the calculation of cultural distance based on single country samples the resulting cultural distance measures typically are highly correlated with one or more of the varying countries underlying national culture dimensions making it impossible to determine whether findings are due to cultural distance or to varying countries national culture effects this is referred to as a confounded variables problem and means that for an overwhelming number of cultural distance studies we cannot with certainty have confidence in the verity of their findings to resolve this uncertainty we propose that cultural distance scholars select samples comprised of at least two home host countries we empirically demonstrate that two country samples where most of the national culture dimensions for the two countries differ create certitude with respect to results eliminating the cultural distance confounded variables problem we describe the single country sample problem illustrate the proposed a priori two country solution and suggest avenues for future research

do country level institutional frameworks and interfirm governance arrangements substitute or complement in international business relationships interfirm relationships among partners from institutionally distant environments are subject to governance difficulties owing to the paucity of shared cognitive and regulatory frameworks we examine the potential of formal contracting and relational governance developed at the partnership level to overcome the formal and informal institutional gap at the country level empirical results from a sample of 184 international partnerships of large us firms support an overall substitutive relationship between informal institutional frameworks and interorganizational relational arrangements whereby the performance benefits of relational governance are reinforced at higher degrees of informal institutional distance contrastingly formal institutional frameworks and contractual governance are found to have a complementary relationship with performance gains from formal contracting undermined at higher degrees of formal distance

a retrospective on culture s consequences the 35 year journey abstract our 2006 journal of international business studies article a quarter century of culture s consequences a review of the empirical research incorporating hofstede s cultural values framework provided a comprehensive review of 180 empirical journal articles and edited volume chapters published between 1980 and june 2002 that incorporated hofstede s cross cultural values framework we examined empirical research that positioned culture as either a main or moderating effect the review attempted to make sense of the almost quarter century of research examining the impact of culture at the individual group organization and country levels in the present commentary we provide a a summary of the progress that has been made in the intervening decade and most importantly b a new set of recommendations for the next decade to guide those wishing to study the role of national culture in organizations

distance without direction restoring credibility to a much loved construct in this commentary we build on shenkar s 2001 award winning critique of cultural distance arguing that most distance constructs in fact suffer the same flaws because they oversimplify the relationship between countries overlook their subjective and context specific nature and pay insufficient attention to the mechanisms through which distance operates the idea of distance however has intrinsic value moreover its considerable appeal and undeniable effectiveness have made it a well entrenched construct therefore we see merit in redressing its weaknesses and offer several suggestions for doing so these include allowing for the influence of firm level characteristics that either moderate the effects of distance or render distance at least in part subjective with varying consequences for different mnes maintaining directionality by distinguishing between distance and the tendency toward a particular characteristic and acknowledging asymmetry and conceptualizing the effects of distance and the mechanisms through which it operates more carefully by drawing on concepts and measures from a variety of disciplines by offering ways to strengthen both its theoretical foundations and measurement we hope to enhance the usefulness of one of international business theory s most central constructs

transaction cost determinants and ownership based entry mode choice a meta analytical review entry mode choice is a critical ingredient of international entry strategies and has been voluminously examined in the field the findings however are very mixed especially with respect to transaction cost related factors in determining the ownership based entry mode choice this study conducted a meta analysis to quantitatively summarize the literature and empirically generalize more conclusive findings based on the 106 effect sizes of 38 empirical studies the meta analysis shows that the findings of the existing studies are moderated to varying degrees by both study setting factors and statistical artifacts although the combined overall effects of transaction cost based determinants are consistent with the predictions of transaction cost economics we extensively discuss the implications of meta analytical results especially moderating effects of location country of origin industry type and statistical artifacts highlight the measurement adequacy equivalence and multidimensionality of transaction cost determinants and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice

do international acquisitions by emerging economy firms create shareholder value the case of indian firms while overseas acquisitions by emerging economy firms are gaining increased attention from the business press our understanding of whether and why this inorganic mode of international expansion creates value to acquirer firms is limited we argue that international acquisitions facilitate internalization of tangible and intangible resources that are both difficult to trade through market transactions and take time to develop internally thus constituting an important strategic lever of value creation for emerging economy firms furthermore the magnitude of value created will be higher when the target firms are located in advanced economic and institutional environments country markets that carry the promise of higher quality of resources and therefore stronger complementarity to the existing capabilities of emerging economy firms an event study of 425 cross border acquisitions by indian firms during 2000 2007 supports our predictions

does subculture within a country matter a cross cultural study of motivational domains and business performance in brazil this study examines the effects of within country subcultures on business outcomes we first argue that individuals values vary across subcultures we then suggest that values as expressed through motivational domains influence business performance finally joining these two propositions we posit that business performance will vary by subculture based on data from four regional subcultures in brazil a subculture effect was found for both motivational domains and business performance the results suggest that it is important to consider the cultural variation within a country when examining business outcomes

mapping india s regional subcultures implications for international management as india continues to emerge as a global economic player scholars and practitioners increasingly need to understand the cultural heterogeneity within this large and populous nation based on lenartowicz and roth s framework of culture assessment we have identified nine distinct subcultural regions of india and used explanations grounded in functional and neo institutional theories to account for the origin and maintenance of cultural distinctiveness of these regions further we developed seven cultural value dimensions for the indian society and used these to hypothesize and empirically test the existence of cultural differences within india results supported our hypothesized arguments this study advances our knowledge of how global functional and institutional forces have combined with national forces to shape india s overall culture and how more local forces have shaped its regions methodologically it identifies and develops measures that specifically reflect the values of individuals living in india and uses these to assess intra national cultural differences within this nation further it suggests how use of multiple methods can enable us to understand the simultaneous presence of somewhat contradictory values within a society the study also provides applications of the proposed cultural value dimensions and advises implications of regional subcultures for various social and organizational phenomena

does social trust affect international contracting evidence from foreign bond covenants abstract building on rational choice institutionalism theory and williamson s j econ lit 38 3 595 613 2000 four level social analysis framework we investigate the influence of the informal institution of social trust on debt contract design in an international setting using a sample of non u s firms that issue bonds in the u s debt market we find that yankee bond creditors impose fewer covenants on bond issuers domiciled in countries with a high degree of social trust we further show that the inverse relationship between debt covenants and the informal institution of social trust is more pronounced for firms from countries with weak formal institutions as well as for firms with poor corporate governance and greater information opacity these findings are robust to endogeneity tests within country analysis various empirical models and measures of trust and alternative hypotheses we also show that while a lower level of informal social trust is associated with higher borrowing costs this relationship weakens when formal covenants are added to the debt contract i e a substitution effect our paper contributes to the international business literature by providing new insights into the role of informal institutions social trust in cross border debt contracting

when elephants fight the grass gets trampled the globe and hofstede projects four aspects of the debate between hofstede and javidan et al are highlighted first it is shown that characterizing cultures either on the basis of aggregated self perceptions or on the basis of aggregated perceptions of others in one s society are not equivalent procedures each has inherent errors and neither can be considered as providing the one best way to denote national cultures furthermore the number of dimensions of national culture that can be usefully studied must be proportional to the limited number of nations available for comparative analyses third although hofstede and javidan et al appear to differ on optimal ways of aggregating individual level data to the nation level both appear to have done so in a way that does not prevent detection of differing relations between items at different levels of analysis finally we need greater clarity as to the ways in which national wealth relates to other aspects of culture it is a major component of contemporary national cultures and must be retained as an element within nation level analyses

business cycle synchronization and regional integration a case study for central america deeper trade integration between central america and the united states as envisaged under the central american free trade agreement is likely to lead to closer links between central american and u s business cycles this article assesses the degree of business cycle synchronization between central america and the united states relevant not only for a better understanding of the influence of important trading partners on the business cycle fluctuations in the domestic economy but for evaluating the costs and benefits of macroeconomic coordination if business cycles are similar and shocks are common coordination of macroeconomic policies can become desirable with a common currency as the ultimate form of policy coordination but if shocks are predominately country specific resulting in little business cycle synchronization independent monetary and fiscal policies are generally seen as important in helping an economy adjust to a new equilibrium clearly if business cycles are affected predominately by country specific shocks and are likely to continue to be so intensified macroeconomic coordination as part of regional integration might do more harm than good

the impact of institutional hazards on foreign multinational activity a contingency perspective prior studies have shown that institutional hazards in the form of formal governance deficiencies and informal cultural distance are both negatively related to the amount of foreign multinational activity in countries we argue that the strength of these negative relationships varies systematically with the type of foreign activity horizontal or vertical and the type of institutional hazard governance or cultural because institutional hazards striking vertical affiliates generally also have negative consequences for other parts of a multinational enterprise mne while those striking horizontal affiliates do not we hypothesize that institutional hazards are more negatively related to vertical foreign activity than to horizontal foreign activity since cultural hazards can generally be reduced or resolved once they materialize while governance hazards cannot we also hypothesize that the impact of governance hazards on each type of foreign activity is more negative than the impact of cultural hazards on that type of activity a panel data analysis of sales by us foreign affiliates to affiliated and local unaffiliated customers over the period 1996 2004 lends support to these hypotheses our findings thus show that the impact of institutional hazards on foreign mne activity is more complex than previously assumed

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

cross border acquisition abandonment and completion the effect of institutional differences and organizational learning in the international business service industry 1981 2001 based on the concepts of north s 1990 political economy of national institutions and economic behavior we investigate how formal and informal institutional features influence the likelihood that a cross border acquisition deal will be completed as well as the time taken for its completion after announcement additionally we study how past experience with completed acquisition deals moderates the effects of institutional differences we focus on a relatively new context the pre completion stage of acquisition processes we test our hypotheses using data from 2389 announced cross border acquisition deals in the international business service industry 1981 2001 we find that differences in national formal and informal institutions explain part of the variation in the likelihood that an announced cross border acquisition deal will be completed as well as the duration of the deal making in addition organizational learning moderates the effects of institutional distance past experience with completed cross border acquisition deals increases the likelihood of a subsequent deal completion in institutionally closer environments but shortens the deal duration in institutionally distant environments

the stampede toward hofstede s framework avoiding the sample design pit in cross cultural research we propose a method to design better multi country samples for international business studies using hofstede s framework and aimed at determining the effects of national culture on various business phenomena we describe typical research scenarios then develop sets of algorithms that calculate indexes reflecting the power of different samples for hypotheses testing the indexes were computed from hofstede s data then rank ordered the top multi country samples are presented in tables for selection when designing studies

the impact of natural culture and economic ideology on managerial work values a study of the united states russia japan and china this study assesses the impact of economic ideology and national culture on the individual work values of managers in the united states russia japan and china the convergence divergence crossvergence cdc framework was used as theoretical framework for the study while the schwartz value survey svs was used to operationalize over investigation of managerial work values across these four countries the findings largely support the crossvergence prospective while also confirming the role of national culture implications from the findings are drawn for the convergence divergence crossvergence of values as well as for the feasibility of multidomestic or global strategies for a corporate culture

the asymmetric impact of context on advantaged versus disadvantaged options abstractdespite substantial prior research regarding the effect of context on choices uncertainty remains regarding when particular context effects will be observed in this article the authors advance a new perspective on context dependent choices according to which context effects are a function of the relative advantage of one option over another and of the different strategies that decision makers evoke when making a choice they propose that context effects resulting from the addition of a third option to a two option set are more frequently observed when the added option is relatively similar adjacent to the disadvantaged alternative i e the lower share option in the set the authors conduct a series of studies to analyze the occurrence of context effects and find support for predictions related to asymmetric dominance and extremeness aversion

lost that lovin feeling the erosion of trust between small high distance partners we investigate the role of high distance in trust erosion between small partners high distance is known to hinder the formation of trust between potential partners but its role in trust erosion in established partnerships is less understood by international business scholars through a qualitative longitudinal study we extend current theory of how high distance affects the trust dynamics between cross border partners specifically we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance we show that before a partnership is formed high distance can lead partners to erroneously attribute cues to a potential partner s high quality leading to over expectations of partner performance once the partnership is operational high distance hinders actors ability to understand situational factors associated with disappointing outcomes and so they are attributed to failings of the partner at the same time distance related challenges of bounded reliability render partners reluctant to discuss partnership outcomes this can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other s quality thus our theoretical model illustrates the limitations of trust and explains how paradoxically high distance can facilitate both trust formation and trust erosion

mnes as border crossing multi location enterprises the role of discontinuities in geographic space spurred by the classic work of dunning mne location has become the focus of a growing body of research in the field in this paper we argue that international business ib research examining the spatial dimension has serious weaknesses stemming from its traditional assumption of the country as the location unit of analysis while border crossing remains the key research context of ib placing it within a general spatial framework that recognizes both international and subnational spatial heterogeneity opens up vast new vistas for research analyzing mnes as border crossing multi location enterprises allows the researcher to distinguish between discrete border effects and continuous distance effects and undertake a more fine grained analysis of location within such analysis national borders may appear as qualitative discontinuities in space that is points at which spatial heterogeneity changes abruptly however subnational spatial heterogeneity is often the characteristic that drives firm strategy as mnes decide to locate in particular agglomerations and not at random locations within a country the complex firms that ib scholars study typically include multiple units within the same country so that a complete analysis requires considering both subnational distance effects as well as international border effects

traversing cultural boundaries in ib the complex relationships between explicit country and implicit cultural group boundaries at multiple levels international business ib scholars continue to struggle to theorize the relationship between country and cultural group boundaries to progress we first consider functional institutional and critical event explanations for cultural characteristics and boundaries second we contrast theories of explicit global structure based on countries with theories based on implicit cultural groups third we consider the implications of explicit country based and implicit culture group based theorizing for the relationship between explicit country boundaries and implicit cultural group boundaries we do so at three levels that are roughly analogous in country based and culture group based theorizing country ethnic group country cluster civilization and within country region subcultural group political science and other fields that help to understand the relationship between countries and cultural groups but that seldom appear in ib discussions of culture are emphasized one main conclusion is that countries remain linked to cultures because of continuing political reasons for cultural groups to seek to be governed by co ethnics political considerations other than cultural identity however also continue to promote important discontinuities between country and cultural group boundaries we suggest that ib scholars and scholarly ib associations should reconsider their traditional way of defining the ib field because of our advancing understanding of the complex mix of correspondence and discontinuity between country and cultural group boundaries

spatial geography and control in foreign acquisitions this article examines how spatial geography influences firms choice of control in cross border acquisitions cbas building our arguments on the information asymmetry in cbas we argue that geographic distance affects adverse selection and moral hazard problems in cbas geographic distance hinders acquirers efforts to assess the true value of the target firm prompting them to opt for a partial control at the same time geographic distance hampers acquirers ability to manage contractual relationships and integrate target firms prompting them to opt for a full control we argue that the cost and benefit trade off of full vs partial ownership varies at different levels of geographic distance accordingly we propose a curvilinear u shaped relationship between geographic distance and equity ownership this relationship is contingent on acquisition relatedness and the listing status of the acquirer public vs private as the geographic distance between acquirer and target increases acquirers assume higher equity stakes in related acquisitions than in unrelated acquisitions at greater geographic distances public firms acquire more equity ownership than do private firms findings from 10 181 deals across 52 acquiring and 61 target countries provide robust support for these arguments

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

how institutions matter for international business institutional distance effects vs institutional profile effects extant institutional research has failed to make a distinction between the effects of institutional profile and institutional distance on mnes the problem stems from the fact that due to the use of a single reference country variation in institutional distance between the reference country and partner countries is essentially equal to variation in the institutional profiles of these partner countries making institutional distance and institutional profile effects indistinguishable this research begins by demonstrating that the problem of profile distance conflation is relevant for virtually all possible countries as reference points and then showing how this problem is mitigated by using more than one country as reference points from which to calculate institutional distance we conclude that current institutional research in international business is unable to explain how institutions matter for mnes and that a more careful theoretical and empirical distinction between the effects of institutions and institutional distance on cross border business activities is essential for pushing the institutional perspective in international business studies forward multiple reference point research designs are required to achieve this

international experience and fdi location choices of chinese firms the moderating effects of home country government support and host country institutions we examine the extent to which chinese government support of foreign direct investment fdi projects and host country institutional environments interact with prior entry experience by chinese firms and how this interrelationship affects fdi undertaken by chinese firms we hypothesize that home country government support and well established host country institutions enhance organizational capabilities to take risks in fdi as such they reduce the need to accumulate experiential knowledge and capabilities relating to entering host countries based on prior entry experience in a particular country when undertaking follow up investment projects using a unique hand collected panel data set of chinese publicly listed firms during 2002 2009 we find that home government support and well developed host country institutions reduce the importance of prior entry experience and significantly increase the likelihood of fdi entry into a host country further from our subsample analyses we identify differences between entering developed and developing host countries in terms of the impact of home country government support and quality of host country institutions our findings help explain the puzzle concerning why emerging economy firms have rapidly internationalized in a short period of time and do not follow the pattern predicted by classical ib theories

what differences in the cultural backgrounds of partners are detrimental for international joint ventures an international joint venture implies that a firm has to cooperate with a partner with a different cultural background in this study hypotheses about which differences in national culture are most disruptive for international joint ventures were developed and tested using hofstede s five dimensions the study focused on how these dimensions affect the survival of international joint ventures as well as their incidence relative to wholly owned subsidiaries the hypotheses were tested on longitudinal data about 828 foreign entries of twenty five dutch multinational in seventy two countries between 1966 and 1994 the database which spans almost three decades was also used to provide new evidence on a key assumption of hofstede s work that cultural values are stable over time

mapping world cultures cluster formation sources and implications this paper extends and builds on ronen and shenkar s synthesized cultural clustering of countries based on similarity and dissimilarity in work related attitudes the new map uses an updated dataset and expands coverage to world areas that were non accessible at the time cluster boundaries are drawn empirically rather than intuitively and the plot obtained is triple nested indicating three levels of similarity across given country pairs also delineated are cluster adjacency and cluster cohesiveness which vary from the highly cohesive arab and anglo clusters to the least cohesive confucian and far eastern clusters exploring predictors of cluster formation we draw on the ecocultural perspective and other inputs and examine the combined role of language religion and geography in generating cluster formation we find that these forces play a prominent yet complex role for instance the religion and language brought by the spanish fail to create a singular cohesive latin american cluster akin to the anglo cluster the role of economic variables is similarly considered finally comparing the current map with that of 1985 we find strong support for the divergence vs convergence argument implications for international business are delineated

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

individualism collectivism in hofstede and globe this paper examines the individualism collectivism i c dimension of national culture in the hofstede and globe models we identify major contradictions between the two culture models which result in contradictory relationships with external variables such as economic prosperity we critically evaluate the content validity of the items used to measure this construct in both models based on our analysis we suggest that hofstede s individualism collectivism index be relabelled as self orientation vs work orientation and globe s in group collectivism as family collectivism we demonstrate how the proposed alternative conceptualizations of the individualism collectivism dimensions in both the hofstede and globe models can help reconcile the anomalous relationships between these two models of national culture and between their dimension scores and other external variables of interest to researchers we recommend a way forward for future research incorporating the collectivism dimensions that identifies which of the hofstede globe scores is appropriate for differing purposes this will help to make future research findings clearer and to reduce contradictions and anomalies implications drawn from such research should also be clearer as a result

the crossvergence perspective reflections and projections in this retrospective i chronicle the development of the crossvergence theory of values evolution which states it is the dynamic interaction of the sociocultural influences with the business ideology influences that provides the driving force to precipitate the development of new and unique values systems in societies crossvergence theory was introduced in our 1993 jibs paper and was the focus of our 1997 decade award paper as well as of a series of subsequent papers thus i discuss the purpose and findings for six papers that have contributed to our present level of knowledge concerning crossvergence theory i conclude my comments with a discussion of the relevance of longitudinal and multilevel research measures found to be useful and methodologies to consider as well as identifying research topics in need of exploration

the dubious role of institutions in international business a road forward our commentary returns to the conundrum of how institutions matter in international business ib by revisiting the 2018 jibs decade award article by jackson and deeg 2008 on comparing capitalisms we first synthesize their main insights around institutional diversity and track its significant impact within ib and other management fields we then suggest three main takeaways that could move jackson and deeg s agenda further in terms of developing a more nuanced approach to institutions in ib we close with suggestions for future research and urge ib scholars to be more cautious when drawing on different strands of institutions theory

what s in a p reassessing best practices for conducting and reporting hypothesis testing research social science research has recently been subject to considerable criticism regarding the validity and power of empirical tests published in leading journals and business scholarship is no exception transparency and replicability of empirical findings are essential to build a cumulative body of scholarly knowledge yet current practices are under increased scrutiny to achieve these objectives jibs is therefore discussing and revising its editorial practices to enhance the validity of empirical research in this editorial we reflect on best practices with respect to conducting reporting and discussing the results of quantitative hypothesis testing research and we develop guidelines for authors to enhance the rigor of their empirical work this will not only help readers to assess empirical evidence comprehensively but also enable subsequent research to build a cumulative body of empirical knowledge

institutional cultural and transaction cost influences on entry mode choice and performance in this study we examine foreign market entry mode choice and firm performance for a sample of european union firms examining both financial and non financial performance measures we attempt to determine if firms that select their entry mode based on transaction cost institutional context and cultural context variables perform better than firms that make other mode choices we found that mode choice did matter firms whose mode choice could be predicted by the extended transaction cost model performed significantly better on both financial and non financial measures than did firms whose mode choice could not be predicted by the extended transaction cost model implications for future research are discussed

conceptualizing and measuring distance in international business research recurring questions and best practice guidelines distance is a central concept in international business research yet there is debate about the construct as well as its operationalization in this editorial we address three of the most important recurring questions posed by authors editors and reviewers by examining the theory methods and data of distance research we discuss 1 how to theorize on distance and 2 what method and 3 what data to use when constructing a distance index we develop practical recommendations grounded in theory illustrating and supporting them by calculating cross country distance indices for all available country pairs and two of the most used distance indices cultural and institutional we show that whereas a specific method to calculate distance may matter to some extent the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances overall this editorial highlights the importance of matching data and method to the theoretical argument

the construct of institutional distance through the lens of different institutional perspectives review analysis and recommendations this paper presents a review and critique of the 20 year old literature on institutional distance which has greatly proliferated we start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct organizational institutionalism institutional economics and comparative institutionalism we use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured and to analyze the most common organizational outcomes that have been linked to institutional distance as well as the proposed explanatory mechanisms of those effects we substantiate our qualitative review with a meta analysis which synthesizes the main findings in this area of research building on our review and previous critical work we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms distance versus profile effects and measurement we conclude with actionable recommendations for improving institutional distance research

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships