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Cultural distance, investment flow, and control in cross‐border cooperation
Author(s) -
Lee SeungHyun,
Shenkar Oded,
Li Jiatao
Publication year - 2008
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.685
Subject(s) - negotiation , preference , investment (military) , geographical distance , joint venture , foreign direct investment , business , control (management) , industrial organization , economic geography , economics , microeconomics , commerce , management , political science , sociology , population , demography , politics , law , macroeconomics
Previous research analyzing the impact of cultural distance on joint venture negotiations has often confounded firm and environment effects. To decouple these effects, the cross‐border cooperation preferences of small and medium‐sized Korean firms were studied, considering simultaneously firms involved in inward and outward investment ventures. While cultural distance showed no significant relationship with the degree of control sought over the cooperative ventures, cultural distance was significantly related with a preference for ventures in domestic or foreign markets. The impact of cultural distance was found to be greater in inward investment than in outward investment. Copyright © 2008 John Wiley & Sons, Ltd.