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Impact of cultural positions on FDI’s entry mode

Cristina López-Duarte (Faculty of Commerce, Tourism and Social Sciences, Department of Business, University of Oviedo, Gijón, Spain)
Marta M. Vidal-Suárez (Department of Business, Fc. Commerce, Tourism and Social Sciences, University of Oviedo, Gijón, Spain)
Belén González-Díaz (Faculty of Commerce, Tourism and Social Sciences, Department of Business, University of Oviedo, Gijón, Spain)

Cross Cultural Management: An International Journal

ISSN: 1352-7606

Article publication date: 3 August 2015

2003

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

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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