Abstract
This Counterpoint investigates the continued relevance of the 30-year-old Kogut and Singh (KS) index of cultural distance. KS was a seminal contribution, highlighting the relevance of cultural differences in IB. However, since then, simplistic replications of the original arguments and index have prevented us from progressing towards a better understanding of how cross-national differences matter. We discuss the mechanisms underlying the construct and how they relate to the algorithm, data, and its critiques. We call for more theoretically informed approaches, highlighting the underlying mechanisms, and specifying which data and algorithms best capture those mechanisms in each research context.
Résumé
Ce Contrepoint étudie la pertinence continue de l’indice de Kogut et Singh (KS) de 30 ans sur la distance culturelle. KS était une contribution majeure, mettant en évidence la pertinence des différences culturelles dans l’international business. Cependant, depuis lors, la réplication simpliste des arguments et index originaux nous a empêchés de progresser vers une meilleure compréhension du comment les différences transnationales agissent. Nous discutons des mécanismes sous-jacents à la construction et de leur relation avec l’algorithme, les données et ses critiques. Nous appelons à des approches plus théoriques, mettant en évidence les mécanismes sous-jacents et spécifiant quelles données et quels algorithmes capturent le mieux ces mécanismes dans chaque contexte de recherche.
Resumen
Este contrapunto investiga la relevancia continuada del índice de distancia cultural de Kogut y Sight (KS) de 30 años de edad. KS fue una contribución fundamental, resaltando la relevancia de las diferencias culturales en negocios internacionales. Sin embargo, desde entonces la reproducción simplificada de los argumentos y el índice originales nos han impedido avanzar hacia un mejor entendimiento de cómo las diferencias entre países importan. Discutimos los mecanismos subyacentes al constructo y cómo estos se relacionan con el algoritmo, los datos y sus críticas. Hacemos un llamado para tener más abordajes teóricamente informados, resaltando los mecanismos subyacentes, y especificando qué datos y algoritmos capturan mejor esos mecanismos en cada contexto de investigación.
Resumo
Este contraponto investiga a continuada relevância do índice de distância cultural de Kogut e Singh (KS) de 30 anos de idade. KS foi uma contribuição seminal, destacando a relevância das diferenças culturais em IB. No entanto, desde então, a replicação simplista dos argumentos e índice originais nos impediu de avançar para uma melhor compreensão de como as diferenças entre países são importantes. Discutimos os mecanismos subjacentes ao construto e como eles se relacionam com o algoritmo, dados e suas críticas. Solicitamos abordagens mais teoricamente informadas, destacando os mecanismos subjacentes e especificando quais dados e algoritmos capturam melhor esses mecanismos em cada contexto de pesquisa.
摘要
这篇对论调查了30年的Kogut和Singh(KS)文化距离指数的持续相关性。KS是一项开创性的贡献, 突出了国际商务(IB)里文化差异的相关性。然而, 从那以后, 对原始论点和指数的简单复制使我们无法更好地理解跨国差异如何重要。我们讨论了该概念的一些根本的机制以及它们与算法、数据及其批评的关系。我们需要更多的对理论有启发的方法, 突出根本机制, 并明确哪些数据和算法最好地抓住了每个研究情境中的那些机制。
Similar content being viewed by others
References
Anderson, E., & Gatignon, H. 1986. Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17(3): 1–26.
Barkema, H., & Drogendijk, R. 2007. Internationalising in small, incremental or larger steps? Journal of International Business Studies, 38(7): 1132–1148.
Barkema, H. G., & Vermeulen, F. 1998. International expansion through start-up or through acquisition: A learning perspective. Academy of Management Journal, 41(1): 7–26.
Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99–120.
Bernhard, H., Fehr, E., & Fischbacher, U. 2006. Group affiliation and altruistic norm enforcement. American Economic Review, 96(2): 217–221.
Berry, H., Guillen, M., & Zhou, A. 2010. An institutional approach to cross-national distance. Journal of International Business Studies, 41(9): 1460–1480.
Beugelsdijk, S., Kostova, T., Kunst, V. E., Spadafora, E., & van Essen, M. 2018. Cultural distance and firm internationalization: A meta-analytical review and theoretical implications. Journal of Management, 44(1): 89–130.
Brewer, M. B. 1979. In-group bias in the minimal intergroup situation: A cognitive-motivational analysis. Psychological Bulletin, 86(2): 307–324.
Brouthers, E. L., Marshall, B. V., & Keig, L. D. 2016. Solving the single-country sample problem in cultural distance studies. Journal of International Business Studies, 47(4): 471–479.
Brouthers, K. D., & Brouthers, L. E. 2001. Explaining the national cultural distance paradox. Journal of International Business Studies, 32(1): 177–192.
Chen, C. C., Peng, M. W., & Saparito, P. A. 2002. Individualism, collectivism, and opportunism: A cultural perspective on transaction cost economics. Journal of Management, 28(4): 567–583.
Choi, J., & Contractor, F. J. 2016. Choosing an appropriate alliance governance mode: The role of institutional, cultural and geographical distance in international research & development (R&D) collaborations. Journal of International Business Studies, 47(2): 210–232.
Coleman, J. 1994. Foundations of social theory. Cambridge, MA: Harvard University Press.
Cuypers, I. R. P., Ertug, G., Heugens, P., Kogut, B., & Zou, T. 2018. The making of a construct: Lessons from 30 years of the Kogut and Singh cultural distance index. Journal of International Business Studies. https://doi.org/10.1057/s41267-018-0181-5.
Dai, N., & Nahata, R. 2016. Cultural differences and cross-border venture capital syndication. Journal of International Business Studies, 47(2): 140–169.
DiMaggio, P., & Powell, W. W. 1983. The iron cage revisited: Collective rationality and institutional isomorphism in organizational fields. American Sociological Review, 48(2): 147–160.
Dow, D. 2017. Are we at a turning point for distance research in international business studies? In R. van Tulder, J. Puck, & A. Verbeke (Eds.), The cost and value of distance in international business research, progress in international business research: Vol. 12, pp. 47–68. Bingley: Emerald.
Dow, D., Baack, D. W., & Parente, R. 2018. The role of psychic distance in entry mode decisions: Magnifying the threat of opportunism or increasing the need for local knowledge? Global Strategy Journal. https://doi.org/10.1002/gsj.1309.
Dow, D., Cuypers, I. R. P., & Ertug, G. 2016. The effects of within-country linguistic and religious diversity on foreign acquisitions. Journal of International Business Studies, 47(3): 319–346.
Dow, D., & Karunaratna, A. 2006. Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies, 37(5): 575–577.
Eden, L., & Miller, S. R. 2004. Distance matters: Liability of foreignness, institutional distance and ownership strategy. In M. Hitt & J. Cheng (Eds.), Theories of the multinational enterprise: Diversity, complexity and relevance: 187–221. Bingley: Emerald.
Edwards, J. R. 2001. Ten difference score myths. Organizational Research Methods, 4(3): 265–287.
Edwards, J. R. 2002. Alternatives to difference scores: Polynomial regression and response surface methodology. In F. Drasgow & N. W. Schmitt (Eds.), Measuring & analyzing behavior in organizations: Advances in measurement & data analysis: 350–400. San Francisco: Jossey-Bass.
Edwards, J. R. 2008. Person–environment fit in organizations: An assessment of theoretical progress. Academy of Management Annals, 2(1): 167–230.
Fitzsimmons, S. R., Liao, Y., & Thomas, D. C. 2017. From crossing cultures to straddling them: An empirical examination of outcomes for multicultural employees. Journal of International Business Studies, 48(1): 63–89.
Gaur, A. S., & Lu, J. W. 2007. Ownership strategies and survival of foreign subsidiaries: Impacts of institutional distance and experience. Journal of Management, 33(1): 84–110.
Gorodnichenko, Y., & Roland, G. 2011. Which dimensions of culture matter for long-run growth? American Economic Review, 101(3): 492–498.
Håkanson, L., & Ambos, B. 2010. The antecedents of psychic distance. Journal of International Management, 16(3): 195–210.
Halaszovich, T. 2017. The concept of institutional and cultural compatibility. In R. van Tulder, J. Puck & A. Verbeke (Eds.), The cost and value of distance in international business research, progress in international business research: Vol. 12, pp. 107–133. Bingley: Emerald Publishing Limited.
Harzing, A. W. 2003. The role of culture in entry mode studies: From neglect to myopia. In J. Cheng & M. Hitt (Eds.), Advances in international management. Elsevier/JAI: Amsterdam/New York.
Harzing, A. W., & Pudelko, M. 2016. Do we need to distance ourselves from the distance concept? Why home and host country context might matter more than (cultural) distance. Management International Review, 56(1): 1–34.
Hennart, J.-F. 1988. A transaction costs theory of equity joint ventures. Strategic Management Journal, 9(4): 361–374.
Hennart, J.-F., & Park, Y. R. 1993. Greenfield vs acquisition: The strategy of Japanese investors in the United States. Management Science, 39(9): 1054–1070.
Hutzschenreuter, T., Kleindienst, I., & Lange, S. 2016. The concept of distance in international business research: A review and research agenda. International Journal of Management Reviews, 18(2): 160–179.
Hutzschenreuter, T., & Matt, T. 2017. MNE internationalization patterns, the roles of knowledge stocks, and the portfolio of MNE subsidiaries. Journal of International Business Studies, 48(9): 1131–1150.
Johanson, J., & Vahlne, J. E. 1977. The internationalization process of the Firm-A Model of knowledge development and increasing foreign commitments. Journal of International Business Studies, 8(1): 23–32.
Johanson, J., & Vahlne, J. E. 1990. The mechanism of internationalisation. International Marketing Review, 7(4): 11–24.
Johanson, J., & Vahlne, J. E. 2009. The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9): 1411–1431.
Kirkman, B. I., Lowe, K. B., & Gibson, C. B. 2006. A quarter century of Culture’s Consequences: A review of empirical research incorporating Hofstede’s cultural values framework. Journal of International Business Studies, 37(3): 285–320.
Klasing, M. J. 2013. Cultural dimensions, collective values and their importance for institutions. Journal of Comparative Economics, 41(2): 447–467.
Klier, H., Schwens, C., Zapkau, F. B., & Dikova, D. 2017. Which resources matter how and where? A meta-analysis on firms’ foreign establishment mode choice. Journal of Management Studies, 54(3): 304–339.
Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3): 411–432.
Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1): 64–81.
Kristof-Brown, A. L., Zimmerman, R. D., & Johnson, E. C. 2005. Consequences of individuals’ fit at work: A meta-analysis for person-job, person-organization, person-group, and person-supervisor fit. Personnel Psychology, 58(2): 281–342.
Lew, Y. K., Sinkovics, R. R., Yamin, M., & Khan, Z. 2016. Trans-specialization understanding in international technology alliances: The influence of cultural distance. Journal of International Business Studies, 47(5): 577–594.
Magnusson, P., Baack, D. W., Zdravkovic, S., Staub, K., & Amine, L. 2008. Meta-analysis of cultural differences: Another slice at the apple. International Business Review, 17(5): 520–532.
Maitland, E., & Sammartino, A. 2015. Managerial cognition and internationalization. Journal of International Business Studies, 46(7): 733–760.
Maseland, R. 2013. Parasitical cultures? The cultural origins of institutions and development. Journal of Economic Growth, 18(2): 109–136.
Maseland, R., & van Hoorn, A. 2017. Culture at the country level. In H. van Herk & C. Torelli (Eds.), Cross cultural issues in consumer science and consumer psychology: 7–32. Cham: Springer.
Merkin, R., Taras, V., & Steel, P. 2014. State of the art themes in cross-cultural communication research: A systematic and meta-analytic review. International Journal of Intercultural Relations, 38: 1–23.
Meyer, K., Mudambi, R., & Narula, R. 2011. Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48(2): 235–252.
Morosini, P., Shane, S., & Singh, H. 1998. National cultural distance and cross-border acquisition performance. Journal of International Business Studies, 29(1): 137–158.
Morschett, D., Schramm-Klein, H., & Swoboda, B. 2010. Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice? Journal of International Management, 16: 60–77.
Nebus, J., & Chai, K. 2014. Putting the “psychic” back in psychic distance: Awareness, perceptions and understandings and dimensions of psychic distance. Journal of International Management, 20: 8–24.
North, D. 1987. Institutions, transaction costs and economic growth. Economic Inquiry, 25(3): 419–428.
North, D. 1990. Institutions, institutional change and economic performance. Cambridge, MA: Cambridge University Press.
Reus, T. H., & Rottig, D. 2009. Meta-analyses of international joint venture performance determinants: Evidence for theory, methodological artifacts and the unique context of China. Management International Review, 49(5): 607–640.
Rickley, M., & Karim, S. 2018. Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing. Journal of World Business, 53(5): 740–751.
Scott, W. R. 1995. Institutions and organizations. Thousand Oaks, CA: Sage.
Scott, W. R. 2013. Institutions and organizations: Ideas, interests, and identities. London: Sage Publications.
Shenkar, O. 2001. Cultural Distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 32(3): 519–536.
Stahl, G. K., Maznevski, M. L., Voigt, A., & Jonsen, K. 2010. Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups. Journal of International Business Studies, 41(4): 690–709.
Stahl, G. K., Miska, C., Lee, H.-J., & De Luque, M. S. 2017. The upside of cultural differences: Towards a more balanced treatment of culture in cross-cultural management research. Cross Cultural and Strategic Management, 24(1): 2–12.
Stahl, G. K., & Tung, R. L. 2015. Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46(4): 391–414.
Stahl, G. K., & Voigt, A. 2008. Do cultures matter in mergers and acquisitions? A tentative model and examination. Organization Science, 19(1): 160–176.
Steel, P., Schmidt, J., Bosco, F., & Uggerslev, K. 2018. The effects of personality on job satisfaction and life satisfaction: A meta-analytic investigation accounting for bandwidth–fidelity and commensurability. Human Relations. https://doi.org/10.1177/0018726718771465.
Tabellini, G. 2010. Culture and institutions: Economic development in the regions of Europe. Journal of the European Economic Association, 8(4): 677–716.
Tajfel, H., & Turner, J. 1985. The social identity theory of intergroup behavior. In S. Worchel & W. G. Austin (Eds.), Psychology of intergroup relations: 7–24. Chicago: Prentice Hall.
Taras, V., Rowney, J., & Steel, P. 2009. Half a century of measuring culture: Review of approaches, challenges, and limitations based on the analysis of 121 instruments for quantifying culture. Journal of International Management, 15: 357–373.
Tihanyi, L., Griffith, D. A., & Russell, C. J. 2005. The effect of cultural distance on entry mode choice, international diversification, and MNE performance: A meta-analysis. Journal of International Business Studies, 36(3): 270–283.
Tung, R. L., & Verbeke, A. 2010. Beyond Hofstede and GLOBE: Improving the quality of cross-cultural research. Journal of International Business Studies, 41(8): 1259–1274.
van Hoorn, A., & Maseland, R. 2016. How institutions matter for international business: Institutional distance effects vs. institutional profile effects. Journal of International Business Studies, 47(3): 374–381.
Verbeke, A., & Kano, L. 2015. The new internalization theory and multinational enterprises from emerging economies: A business history perspective. Business History Review, 89(3): 415–445.
Wallis, J. 2011. Institutions, organizations, impersonality, and interests: The dynamics of institutions. Journal of Economic Behavior & Organization, 79(1–2): 48–64.
Williams, D. W., & Grégoire, D. A. 2015. Seeking commonalities or avoiding differences? Re-conceptualizing distance and its effects on internationalization decisions. Journal of International Business Studies, 46(3): 253–284.
Williamson, O. E. 1985. The economic institutions of capitalism. New York: Free Press.
Williamson, O. 1993. Calculativeness, trust, and economic organization. Journal of Law and Economics, 36(1): 453–486.
Yildiz, H. E., & Fey, C. F. 2016. Are the extent and effect of psychic distance perceptions symmetrical in cross-border M&As? Evidence from a two-country study. Journal of International Business Studies, 47(7): 830–857.
Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38(2): 341–363.
Zaheer, S., & Mosakowski, E. 1997. The dynamics of the liability of foreignness: A global study of survival in financial services. Strategic Management Journal, 18(6): 439–463.
Zaheer, S., Schomaker, M. S., & Nachum, L. 2012. Distance without direction: Restoring credibility to a much-loved construct. Journal of International Business Studies, 43(1): 18–27.
Zhao, H., Luo, Y., & Suh, T. 2004. Transaction Cost determinants and ownership-based entry mode choice: A meta-analytic review. Journal of International Business Studies, 35(6): 524–544.
Author information
Authors and Affiliations
Corresponding author
Additional information
Accepted by Stav Fainshmidt, Guest Editor, 15 September 2018. This article has been with the authors for two revisions.
Rights and permissions
About this article
Cite this article
Maseland, R., Dow, D. & Steel, P. The Kogut and Singh national cultural distance index: Time to start using it as a springboard rather than a crutch. J Int Bus Stud 49, 1154–1166 (2018). https://doi.org/10.1057/s41267-018-0183-3
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1057/s41267-018-0183-3