Toward a more in-depth measurement of cultural distance

A re-evaluation of the underlying assumptions

Bibliographic Data

ID12701447
AuthorsHenrique Corrêa da Cunha (0000-0003-0969-8671, Toronto Metropolitan University, corresponding author), Carlyle Farrell (Toronto Metropolitan University), Svante Andersson (0000-0002-8194-2053, Center for Innovation, Entrepreneurship and Learning (CIEL), Halmstad University, Halmstad, Sweden), Mohamed Amal (0000-0001-7851-267X, University of Vale do Itajaí, Itajaí, SC, Brazil), Dinorá Eliete Floriani (0000-0001-7898-284X, Universidade Regional de Blumenau)
Year2022
Volume22
Issue1
Pages157-188
Publication date2022-03-24
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueInternational Journal of Cross Cultural Management (JOURNAL)
Journal identifiersISSN: 1470-5958 • E-ISSN: 1741-2838
PublisherSAGE Publishing (PUBLISHER • US)
DOI10.1177/14705958221089192
OpenAlexW4220686332
LanguageEN
Citations received2
References cited79

Some 20 years ago, Shenkar (2001) criticized several of the underlying assumptions of the cultural distance (CD) construct. Despite this, researchers continue to use the same metric which fails to address many of the underlying problems. As a result, CD studies seem to generate results which are often contradictory. Rather than rejecting the distance metaphor, the main objective of this study is to provide a more in-depth measure of CD that addresses the assumptions of linearity, symmetry, equivalence, and discordance. We propose that, while the size of the cultural distance between home and host countries may be relevant for some dimensions, it is incomplete, as it does not account for the distinct characteristics of the cultural dimensions, the direction toward countries with different profiles and the contextual settings of the study. We test our hypotheses on a sample from the Orbis database consisting of foreign subsidiary firms from Latin America, other emerging markets from outside the region, and from developed countries operating in 10 of the largest economies in Latin America. Our dataset includes 4226 firm-year observations and a combination of 168 home and host countries. Latin America provides a suitable context for this study, not only because of the diversity of firms from different contexts operating in the region, but also because the region allows us to investigate the influence of home country history and tradition on firms’ ability to conduct business in different cultural contexts. Our assessment of CD shows in a precise manner that size together with direction might be adequate for describing the effects of some dimensions of CD on firm performance, while for other dimensions, it is clearly a matter of country profile. By combining our metric with different national culture frameworks, future studies would be able to complement and strengthen our findings and conclusions

Business · Construct (python library · Context (archaeology · Cultural diversity · Diversity (politics · Economic geography · Economics · Emerging markets · Equivalence (formal languages · Geography · Hofstede's cultural dimensions theory · International business · Latin Americans · Linguistics · Management · Metaphor · Metric (unit · Political science · Positive economics · Sample (material · Social science · Sociology · Computer Science · Family Business Performance and Succession · Innovation and Knowledge Management · International Business and FDI · Law · Marketing

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