This study investigates if and to what extent there is a statistically significant predictive relationship between cultural distance, and its subfactors (power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity), and entry mode by Western Europe MNE into Eastern Asia. Using transaction cost economic theory, the quantitative study with a predictive correlational design was conducted on 490 cross-border mergers and acquisitions by MNE from seven Western European countries entering five Eastern Asian countries from 2005 to 2015. Data for the entry mode criterion was obtained from SDC platinum and Hofstede’s cultural dimensions were used as predictors. Hierarchical multiple regression was conducted on entry mode and cultural distance as a construct, and hierarchical multiple regression was conducted on entry mode and four cultural dimensions. The findings indicate that cultural distance has an inverted U-shaped predictive relationship with entry mode, R2 = .024, p = .001. As cultural distance increases MNE managers tend to use a higher equity entry mode until reaching a point after which any further increase in cultural distance a lower equity entry mode was used. It was also found that uncertainty avoidance has a positive predictive relationship with entry mode, R 2 = .010, F(1, 488) = 5.157, p = .024, B = .034, p = .024. Additionally, entry mode is best predicted by a model with uncertainty avoidance and power distance, R2 = .022, p = .004. These findings indicate that using unindexed cultural dimensions may also demonstrate a significantly predictive relationship while providing additional contextual information than can be found with an indexed cultural distance construct.
|Commitee:||Casteel, Alex, Gaur, Ajai|
|School:||Grand Canyon University|
|School Location:||United States -- Arizona|
|Source:||DAI-A 80/08(E), Dissertation Abstracts International|
|Subjects:||Business administration, Transportation|
|Keywords:||Cross-border mergers and acquisitions, Cultural distance, Curvilinear, Entry mode, Multiple referent sampling, Regional|
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