The Expansion of Foreign Direct Investments: Discrete Rational Location Choices or a Cultural Learning Process?

Wholly Owned Subsidiary Versus Technology Licensing in the Worldwide Chemical Industry

“…Similarly, Davidson (1983), Franko (1989), Gatignon and Anderson (1988) observed an increasing propensity to select wholly owned subsidiaries as experiential knowledge increased. However, Benito and Gripsrud (1992) rejected the hypothesis that current levels of direct investment in culturally remote countries increased with previous levels of foreign direct investment. Davidson and McFetridge (1985) showed a decrease in the reliance on wholly owned subsidiaries as foreign experience increased.…”

Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

“…Moreover, we refrained from using the Euclidean approach since we have no theoretical reason to assume that some dimensions of cultural distance are more important than others (Vermeulen & Barkema, 2001). Overall, we believe that the Kogut and Singh (1988) index adequately captures distances between countries as evidenced by numerous previous studies that had relied on this calculation method in combination with Hofstede's metrics in IB research (Barkema et al, 1996;Barkema & Vermeulen, 1997;Benito & Gripsrud, 1992;Chan & Makino, 2007;Cho & Padmanabhan, 2005;Dow & Ferencikova, 2010;Morosini et al, 1998;Yiu & Makino, 2002).…”

“…Consequently, we believe that Hofstede's metrics still capture important cultural differences as evidenced by the large number of empirical studies that have used his data in IB research (Barkema, Bell, & Pennings, 1996;Barkema & Vermeulen, 1997;Benito & Gripsrud, 1992;Chan & Makino, 2007;Cho & Padmanabhan, 2005;Dow & Ferencikova, 2010;Morosini et al, 1998;Yiu & Makino, 2002). However, as reported below, we conducted tests with other measures of cultural distance as robustness checks (see analyses section), all pointing in the same direction.…”

Working Abroad, Working with Others: How Firms Learn to Operate International Joint Ventures

“…Cultural distance to the host country from the Netherlands was measured with Kogut and Singh's (1988) index. This index is an aggregate of the four dimensions of cultiu-e outlined in Hofstede (1980), and has been used often in studies of foreign entry (Agarwal & Ramaswami, 1992;Benito & Gripsrud. 1992;Cho & Padmanabhan, 1995).'…”