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

Cristina López-Duarte and Marta M. Vidal-Suárez

Journal of Business Research, 2013, vol. 66, issue 11, 2252-2261

Abstract: Most empirical research on the choice between joint ventures and wholly owned subsidiaries analyzes the role of cultural distance in an isolated way. This study explores the potential influence of some factors related to the diversity among countries that are traditionally associated with cultural distance but not explicitly included in measurements of cultural distance. Different approaches to and measurements of cultural distance are used in this analysis. This study examines the potential existence of a moderating or intensifying effect of third variables on the role played by cultural distance. The results confirm the contingent role of host country risk on the choice between equity joint ventures and wholly owned subsidiaries.

Keywords: Foreign direct investment; Cultural distance; Hofstede; Schwartz; GLOBE project; Political risk; Wholly owned subsidiary; Joint venture (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:66:y:2013:i:11:p:2252-2261

DOI: 10.1016/j.jbusres.2012.02.017

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