Project performance in emerging market: The influence of cultural distance and business group affiliation

Somnath Lahiri () and Karthik Dhandapani ()
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Somnath Lahiri: Illinois State University
Karthik Dhandapani: Indian Institute of Management Tiruchirappalli

Asia Pacific Journal of Management, 2021, vol. 38, issue 1, No 8, 179-207

Abstract: Abstract Although foreign multinational enterprises (MNEs) often collaborate with firms in emerging markets to help execute capacity expansion projects, the current literature does not adequately explain what factors influence execution performance of such projects. Drawing on the cultural difference- and partner selection literature we investigate in this paper how cultural distance (CD) between MNE’s home and host nation, and business-group (BG)-affiliation of host country partner influence duration and completion-likelihood of capacity expansion projects. Our analysis reveals that high CD is associated with lower project-duration and greater likelihood of project-completion. Results further suggest that BG-affiliation is associated with greater likelihood of project-completion. In addition, we find that BG-affiliation negatively moderates the relationship between CD and project-duration. These findings are new to the literature and enhances our theoretical and practical understanding of project execution in emerging markets.

Keywords: Project duration; Project completion; Cultural distance; Business group affiliation; Emerging market; India (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s10490-018-9615-7

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