External uncertainty and entry mode choice: Cultural distance, political risk and language diversity

By Cristina López‐Duarte, Marta M. Vidal-Suárez. 2010

209 citations recorded by the source corpus.

This paper aims at analyzing the effect of external uncertainty on the entry mode choice when investing abroad. We consider the effect of uncertainty coming from the formal host country's environment (political risk) and from the informal one (cultural distance). The potential existence of an interaction effect between both of them is also analyzed. In particular, we analyze how language diversity between the home and host countries may condition the influence of this interaction effect on the entry mode choice. In order to empirically test our predictions, a database of foreign direct investments made by Spanish firms is used.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/37af5d8212dd23454a23ffa8da7022d245fcbfd1

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms (2013, unknown): “…literature mentions the relevance of cultural distance in cross-border acquisition performance (Antia, et al., 2007; Aybar & Ficici, 2009; Brock, 2005; He, et al., 2008; López-Duarte & Vidal-Suárez, 2010; Malhotra, et al., 2011; Morosini, 1998; Morosini, et al., 1998; Steigner & Sutton, 2011).”
The effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions (2015, background): “…have investigated the effects of language on governance choices have focused on either a single home country (e.g., Spanish firms entering foreign markets for Lopez-Duarte & Vidal-Suarez, 2010) or a single host country (e.g., foreign firms entering Turkey for Demirbag, Glaister & Tatoglu, 2007).”