Cultural distance and the choice between wholly owned subsidiaries and joint ventures

López-Duarte, Cristina; Vidal-Suárez, Marta M.

doi:10.1016/j.jbusres.2012.02.017

Cited by 57 publications

(21 citation statements)

References 71 publications

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“…National culture distance is not statistically significant in explaining the variation of the performance of foreign affiliates in Saudi Arabia (significance at p <0.05). This goes against the results of previous studies that found that, in most cases, there was a significant correlation with the performance of international companies in emerging countries (Kogut and Singh, 1988;Barkema and Vermeulen, 1997;Leung, 1997;Park and Ungson, 1997;Hennart et al, 1998;Delios and Beamish, 2001;Li et al, 2001;Antia et al, 2007;Meschi and Riccio, 2008;López-Duarte and Vidal-Suárez, 2013;Hancıoğlu et al, 2014). However, the sign of national culture distance is negative.…”

Section: Control Variablescontrasting

confidence: 96%

National cultural differences and foreign direct investment in emergent countries

Zaabi¹

2018

Int. j. adv. appl. sci.

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The aim of this study is to examine the effects of cultural differences on foreign direct investment performance in a rent-based economy. Regression analysis was used to test the hypotheses in a sample of 121 firms. The findings show that cultural distance, in general, did not have an effect on international foreign direct investment performance, but the hypothesis relating individualism scores of cultures from where foreign investment belongs and the performance of foreign affiliates is verified. The moral engagement of local employees appeared to have a catalytic effect. In contrast, uncertainty avoidance does not have any significant impact on the performance of affiliates. We also find that the performance of a foreign affiliate increases when they invest in the industry in which the host country has a comparative advantage.

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Section: Control Variablescontrasting

confidence: 96%

National cultural differences and foreign direct investment in emergent countries

Zaabi¹

2018

Int. j. adv. appl. sci.

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“…We used sixteen control variables. At the host-country level we controlled for: (1) market size, as this may indicate demand for a market-seeking MNE (Gomes-Casseres, 1990) and exploitation-oriented investments (Brouthers and Hennart, 2007); (2) economic development using the natural log of the country's GDP per capita in U.S. dollars and purchasing-power parity (Vaaler and Schrage, 2009); (3) levels of political hazard and uncertainty in the host country using Henisz' political constraints measure (a higher value indicating more veto points amongst the host country's executive and less political uncertainty) (Henisz, 2000); (4) cultural distance, given that this has been shown to be a source of risk that can impact ownership choices (Hennart and Larimo, 1998;López-Duarte and Vidal-Suárez, 2013). At firm level, we controlled for differences between the three parents using dichotomous dummy variables for each parent.…”

Section: Control Variablesmentioning

confidence: 99%

“…It may not only attract technology-intensive MNEs to consider investing in the host country, it has the potential to determine how they invest in the country. While extensive research has looked at location advantages and disadvantages (Dunning, 1998(Dunning, , 2000, the vast body on ownership has tended to emphasize features such as market characteristics, legal barriers, cultural distance and country risk factors (e.g., Agarwal and Ramaswami, 1992;Canabal and White, 2008;Delios and Henisz, 2003;Hennart and Larimo, 1998;López-Duarte and Vidal-Suárez, 2013;Yiu and Makino, 2002). Furthermore, some research on MNE entry strategy focusses on variance in firm and industry characteristics, ignoring the potential that host country R&D may account for entry decisions (e.g., Brouthers and Hennart, 2007;Chen and Hennart, 2002;Dikova, and Van Witteloostuijn, 2007).…”

Section: Introductionmentioning

confidence: 99%

Host country R&D determinants of MNE entry strategy: A study of ownership in the automobile industry

Williams

Alina

2018

Research Policy

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We investigate how host country R&D influences ownership decisions made by technologyintensive multinational enterprises (MNEs) as they internationalize. We draw from institutional and resource based theories, as well as literature on agglomeration and clusters, and construct a unique dataset of 1324 foreign investments recorded by German automobile manufacturers between 2005 and 2012 for our empirical tests. We find that in host countries that are clusterabundant there will be a greater likelihood that technology-intensive MNEs will adopt joint ventures over wholly-owned subsidiaries, and will more likely use a lower equity stake in any joint venture. We find partial support for the influence of other aspects of host country R&D, including innovation output and inward technology FDI. Various robustness tests and insights from selected cases provide further support. Importantly, findings demonstrate the importance of multi-dimensional characteristics of host country R&D over and above those such as market size, political stability and cultural distance that are more commonly utilized and discussed in the entry strategy literature. The findings have implications for host country policy as well as strategy-makers in MNEs seeking to compete on the basis of globalized R&D.

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“…A l'opposé, de nombreux chercheurs se sont efforcés de mesurer la distance culturelle sur la base de facteurs exogènes (López-Duarte et Vidal-Suárez, 2012). En effet, la recherche sur cette question a mobilisé différents indicateurs de mesure de cette distance, très souvent en référence aux travaux de Hofstede (1980) ou de Schwartz (1994).…”

Section: Facteurs Liés à La Perception Du Dirigeant à L'égard Des Payunclassified

Modes d’implantation des PME à l’étranger : le choix entre filiale 100 % et coentreprise internationale

Jean-Amans

Abdellatif

2014

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Cette contribution vise à analyser le choix de s’engager sur les marchés étrangers sous la forme d’entreprises conjointes ou de filiales totalement détenues dans le contexte des PME. Cette recherche s’appuie sur une série d’entretiens semi-directifs conduits sur la période de juillet 2010 à septembre 2010 auprès de 10 PME françaises internationalisées. Nous avons adopté une analyse quali-quantitative comparée (AQQC), méthode initiée par Ragin (1987) et bien adaptée pour étudier un petit nombre de cas, particulièrement dans une démarche comparative. Nous montrons que l’implantation d’une filiale industrielle dans un pays culturellement perçu éloigné de la France se fait par recours à un partenariat local, tandis que les filiales totalement détenues sont le fait de PME s’inscrivant dans un modèle d’internationalisation rapide.

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Cultural distance and the choice between wholly owned subsidiaries and joint ventures

Cited by 57 publications

References 71 publications

National cultural differences and foreign direct investment in emergent countries

National cultural differences and foreign direct investment in emergent countries

Host country R&D determinants of MNE entry strategy: A study of ownership in the automobile industry

Modes d’implantation des PME à l’étranger : le choix entre filiale 100 % et coentreprise internationale

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