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What we know is that the concept of cultural distance is frequently used, hotly debated and for many intuitively appealing. Suffering from a series of illusionary properties, it is argued to have outlived its usefulness. What we need to know is how to conceptualize the complexity of culture as a multi-dimensional, multi-level concept, taking context into account to measure quality rather than quantity (or distance). It is our ambition to do justice to the idea that cultural diversity not only leads to friction or problem creation, but also to enrichment and to generation of solutions. We discuss cultural conceptualizations and suggest cultural profiling and cultural positioning as alternative ways of comparing and contrasting critical cultural differences.

The purpose of this chapter is to make sense of the cultural distance paradox through a basic assessment of the cross-cultural comparability of cultural distance measures. Cultural distance between a base country and partner countries is a key construct in international business (IB). However, we propose that what exactly is measured by cultural distance is unique for each country that is chosen as the base country to/from which cultural distance to a set of partner countries is calculated.

We use a mathematical argument to establish that cultural distance may correlate rather differently with the culture of partner countries depending on which base country one considers, for example, the United States or China. We then use empirical analysis to show the relevance of this argument, using Hofstede’s data on national culture for 69 countries.

Results show that cultural distance indeed has very different correlations with partner country culture, depending on which country one selects as the base country in one’s distance calculations.

Implication of our findings is that measured cultural distance is not equivalent across different base countries. The effect of cultural distance on such issues as foreign market entry mode or market selection, therefore, lacks international generalizability.

This chapter presents the first assessment of the cross-cultural comparability of cultural distance. Paradoxical findings that plague extant cultural distance research may be understood from the found lack of measurement equivalence.

Our study explores the performance implications of deviations in managers’ perceptions of “cultural distance” – one of the most important concepts in International Business research – when expanding into foreign markets. Despite much research on “cultural distance,” few researchers have paid attention to the effect of deviations in managers’ perceptions of cultural distance on firm performance. This is important since managers formulate strategies for responding to the environment based on their perceptions of the firm’s environment. These perceptions, however, do not always coincide with actual environmental characteristics. Therefore, formulating strategies based on inaccurate data may result in erroneous forecasts, missed opportunities and, ultimately, business failure. We explore this empirically by comparing managers’ perceptions of cultural distance to export markets of Swedish SMEs to cultural distance measures based on secondary data and relate deviations of perceptions to the performance of these SMEs. Our results show that the larger the deviations of managers’ perceptions of cultural differences from “actual differences” as expressed in Hofstede scores on cultural dimensions, the lower the performance expressed in firms’ sales. The implications of the study are discussed.

In this study of Korean and US negotiators, the authors aim to demonstrate limits on the presumption that inter‐cultural negotiations are doomed to generate low joint gains.

In a laboratory study with 45 bi‐cultural Korean students and 47 mono‐cultural American students, the authors created a total of 16 US‐US, 15 Korean‐Korean, and 15 US‐Korean dyads. The authors audio‐recorded their negotiation conversations and analyzed the content of the negotiation transcripts. The authors focused on the use of pronouns and coded how they were used and the impact this use had on the outcomes of the intra‐ and inter‐cultural negotiations.

Results show that inter‐cultural dyads generate higher joint gains than Korean or US intra‐cultural dyads. The explanation based on social awareness and social distance theorizing shows that inter‐cultural negotiators, one of whom is bi‐cultural, who use language, especially the pronoun “you” to close social distance, achieve higher joint gains than intra‐cultural negotiators who do not.

The authors conclude that the language people use in social interaction, especially pronouns, is an indicator of social awareness and signals attempts to close social distance.

This research demonstrates that the way negotiators use language predicts their economic outcomes.

The purpose of this study is to propose an alternative basis for calculating cultural distance scores using Schwartz's cultural values.

Cultural distance scores were calculated for 23 countries, based on the two most common measures of cultural difference (four cultural dimensions and Schwartz's 1994 culture level values), following Kogut and Singh's formula. Correlation analysis was used to assess the congruency between these two bases of cultural distance. In addition, their relationship with international trade figures was assessed, to understand how well each framework predicts the amount of trade between countries.

Inter‐country distances between 23 countries suggest that the two bases of cultural distance were not congruent. While the correlation between both cultural distance measures and international trade suggested a negative relationship, as expected, only cultural distance based on Schwartz's values was significantly related to international trade (p<0.05). It would appear that, at least in a trade context, Schwartz's values may play a more significant role than do Hofstede's dimensions.

To date, most cultural distance scores have been based on Hofstede's cultural dimensions. This paper provides the first analysis of cultural distance based on Schwartz's country level values. The paper shows that the two measures are not congruent and that, at least in the context of trade, cultural distance measures based on Schwartz's may be superior. Thus, researchers should carefully consider which cultural base is most appropriate for use in their study.

Some researchers have found that disasters may have a “blessing in disguise effect” that some disaster sites transformed into more popular tourism destinations; however, no studies have analyzed the heterogeneity of the “blessing in disguise effect”. This paper aims to explore and determine the effect of cultural distance on international inbound tourist arrivals to a post-disaster tourist destination that could explain this heterogeneous phenomenon.

This study used a threshold regression model and a differences-in-differences (DID) approach to analyze 2000–2016 international tourist arrival data from 13 main origin countries to Sichuan Province before and after the 2008 Wenchuan Earthquake in China.

The effect of cultural distance on post-disaster inbound arrivals from the various origin countries followed a non-linear U-shaped “double-edged sword” pattern rather than displaying a simple linear relationship. Most notably, the disaster appeared to have a more positive effect on arrivals from countries with larger cultural distances, while the effect on arrivals from countries with shorter cultural distances was negative.

This study found that cultural distance could explain the heterogeneous “blessing in disguise” phenomenon, and it had both positive and negative impacts on tourism destination recovery; that is, a definite “double-edged sword effect” of cultural distance was found, which could help destination marketing organizations and management departments to design appropriately targeted marketing for post-disaster tourism destination recovery.

些研究人员发现, 灾难可能会产生“因祸得福效应”, 即一些灾难现场变成了更受欢迎的旅游目的地。然而, 目前还没有研究分析这种“因祸得福效应”的异质性。本研究旨在探讨文化距离对灾后旅游目的地的国际入境旅游流的影响, 从而解释这种异质性现象。

本文采用门槛回归模型和双重差分法（DID）分析了2008年汶川地震发生前后（2000–2016年）来自13个主要来源国到中国四川省旅游的国际入境旅游流数据。

文化距离对灾后客源国的入境旅游人数的影响呈现非线性的U型“双刃剑”模式, 而不是简单的线性关系。最值得注意的是, 灾难似乎对来自文化距离较大的客源国的游客人数产生了更积极的影响, 而对来自文化距离较短的客源国的游客人数产生了消极的影响。

本研究发现, 文化距离可以解释异质性的“因祸得福”现象, 文化距离对旅游目的地恢复既有积极影响, 也有消极影响, 即文化距离具有明确的“双刃剑效应”。这可以帮助旅游目的地的灾后恢复设计合理的、有针对性的营销策略和恢复政策。

Algunos investigadores han encontrado que los desastres pueden tener la “bendición del efecto disfraz” de que algunos sitios de desastre se transformen en destinos turísticos más populares;Sin embargo, ningún estudio ha analizado la heterogeneidel “efecto de bendición disfrazado”.El objetivo de este estudio es explorar y determinar el efecto de la distancia cultural en los flujos turísticos internacionales hacia un destino turístico después del desastre, lo que podría explicar este fenómeno heterogéneo.

se empleun modelo de regresión de umbral y un enfoque de diferencias en diferencias (DID) para analizar los datos de llegada de turistas internacionales de 2000–2016 de trece países de origen principal A la provincia de Sichuan antes y después del terremoto de Wenchuan de 2008 en China.

el efecto de la distancia cultural en las llegde los diversos países de origen después del desastre siguió un patrón de “espada de doble filo” no lineal en forma de u, en lugar de mostrar una relación lineal simple.Más notablemente, el desastre pareció tener un efecto más positivo en las llegde países con distancias culturales más grandes, mientras que el efecto en las llegde países con distancias culturales más cortas fue negativo.

este estudio encontró que la distancia cultural podría explicar el heterogéneo fenómeno de la “bendición disfrazada” y que tenía impactos tanto positivos como negativos en la recuperación de un destino turístico;Es decir, se encontró un “efecto de doble filo” de la distancia cultural, que podría ayudar a las organizaciones de comercialización de destinos turísticos y a los departamentos de administración a diseñar estrategias de comercialización dirigidas adecuadamente para la recuperación de destinos turísticos después del desastre.

The purpose of this paper is to examine whether the direction of cultural distance in individualism, power distance, uncertainty avoidance, and masculinity affects bilateral foreign direct investment (FDI) activities.

Panel data that include bilateral FDI between 21 OECD countries, and for FDI from these OECD countries to 14 non‐OECD countries between 1980 and 2000 were used. In addition, hypotheses were tested by using Hofstede's cultural dimensions for FDI between 1980 and 1989 and then by applying the GLOBE (Global Leadership and Organizational Behavior Effectiveness) cultural indices for FDI between 1990 and 2000.

It was found that difference in individualism between two countries encourages FDI while difference in power distance discourages FDI. In addition, based on Hofstede's cultural scores, the direction of cultural distance matters when a host and a source country differ in uncertainty avoidance and masculinity. However, the finding is mixed with the GLOBE cultural measures.

In this paper, the aggregation of human behavior theory is relied on to develop a theoretical framework. This type of analysis is valid as long as the companies involved are homogenous. Even if multi‐national companies are heterogeneous, the author believes that a bounded rationality is needed to add some discipline and substance to a more comprehensive but less structured analysis/experience at the individual or firm level.

The paper's findings indicate that a complementary relationship exists for FDI between collective and individualistic countries and difference in power distance discourages FDI. In addition, the direction of cultural distance matters for uncertainty avoidance and masculinity. Therefore, it is not always true that companies should shun countries that are culturally different from their home country when making FDI decisions.

The paper makes several contributions to the extant literature. First, the paper responds to the critique by Shenkar, by applying separate rather than the composite cultural distance in empirical research. Second, the paper suggests that cultural distance is not equal to cultural incongruence. Third, this paper is one of the first that uses a sample size that is similar to the number of countries in Hofstede's original study in 1980. Finally, in response to the stability criticism towards Hofstede's framework, this paper tests the cultural impact on FDI by applying both the Hofstede and GLOBE cultural scores.

As multinational companies enter different countries, the extent of cultural unfamiliarity they face depends on their most recent entry. We examine this pattern of added cultural distance between a newly entered target country and the closest previous one and its effect on ownership decisions in each cross-border acquisition (CBA). We also examine the combined effect of added cultural distance and time between successive acquisitions on such decisions.

The sample came from the Thomson Financial Securities Data Corporation (SDC) Platinum database, which spans different source and target countries for a 25-year period (1980–2014). We collected firm- (acquirer and target), industry-, country-, and transaction-level variables from SDC. After merging information from the different sources, the final sample comprised 10,423 CBA observations from 138 target countries.

Our findings reveal that the ownership share decision is affected negatively by added cultural distance but positively by the time between two successive acquisitions. In addition, prior ownership and geographic distance moderate the relationship between added cultural distance and ownership in CBAs.

Our findings suggest that MNCs' managers who consider CBAs need to carefully examine closest previous target information and CBA experience, rather than focusing on direct cultural distance between the focal firm and target firm. Additionally, they should also consider the relevance of key contingency factors.

We disentangle the effects of added cultural distance on CBA ownership decisions and explore the boundary conditions of this relationship.

This research draws upon construal level theory to investigate how brands can develop effective international marketing strategies using country image versus product image across international markets with different cultural distances between them.

The paper reports two preliminary studies and three experimental studies in the context of Australian brands using a “clean and green” image. The preliminary studies explore how product versus country image and cultural similarity are related to construal levels. Then, Study 1 examines consumers from different countries as a proxy of cultural distance, whereas Studies 2 and 3 manipulate levels of cultural distance to test the effects on consumers. Moreover, Study 3 also uses a behavioral outcome as the focal dependent variable and tests the underlying mechanism.

The results demonstrate a significant interaction effect between country-of-origin positioning and cultural distance, such that an Australian brand emphasizing the country (vs product) image gains more favorable responses among consumers with high levels of cultural distance. Conversely, an Australian brand emphasizing the product (vs country) image gains more favorable responses among consumers with low levels of cultural distance. Further, this research identifies perceived brand cultural authenticity as the underlying process driving the interaction effect.

The findings of this research contribute to the literature on international marketing in general and the country-of-origin literature in particular by examining country-of-origin positioning and cultural distance from the construal level perspective. The research also provides managerial implications on how to promote products in the international market across different cultural distances.

The key to the success of multinational corporations’ (MNCs) business models is the improvement of their innovation quality. From the cross-border knowledge management perspective, this paper aims to analyze the improvement path of innovation quality of MNCs and construct the functional path of the relationships among the knowledge creation, knowledge application and innovation quality of MNCs in the cross-border knowledge management process, so as to achieve the success of their business models. Based on this, this paper introduces cultural distance to further analyze how such relationships will change with the cultural distance level.

Using data from Chinese A-share listed MNCs with production operations located in the Asia-Pacific region from 2014 to 2018, this paper constructs a panel data model to test the mediating effect of knowledge application and the moderating effect of cultural distance on such relationships.

This paper obtains the following research findings: knowledge creation and knowledge application each have a significant, inverted U-shaped relationship with innovation quality; knowledge creation has a significantly positive correlation with knowledge application and knowledge application has a partial mediating effect on the relationship between knowledge creation and innovation quality; cultural distance has a moderating effect on such relationships. The specific moderating direction depends on the extent of the knowledge creation and knowledge application.

The findings are helpful to MNCs’ managers, providing guidance and serve as a reference for them to make strategic decisions on cross-board knowledge management and business models innovation.

The theoretical contributions are summarized as follows: First, it further enriches and expands the theoretical of knowledge management and innovation quality relationship. Second, it further enriches and expands the theoretical framework of knowledge management. Third, it further enriches the theoretical framework of cross-cultural management.