Egalitarianism, Cultural Distance, and Foreign Direct Investment: A New Approach

• 成果类型: Article
• 署名作者: Siegel, Jordan I.; Licht, Amir N.; Schwartz, Shalom H.
• 署名单位: Harvard University; Reichman University; Hebrew University of Jerusalem; HSE University (National Research University Higher School of Economics)
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.1120.0776
• 发表日期: 2013
• 页码: 1174-1194
• 关键词: foreign direct investment (FDI); neoinstitutionalism; GLOBAL STRATEGY; multinational firm; culture; Cultural distance; egalitarianism; Regulatory arbitrage; Pollution Haven Hypothesis; entrepreneurship

摘要

This study addresses an apparent impasse in the research on organizations' responses to cultural distance. We posit that cross-country differences in egalitarianism-a cultural orientation manifested in intolerance for abuses of market and political power and support for protection of less powerful actors-affect multinational firms' choices of destinations for foreign direct investment (FDI). Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms' interactions with nonfinancial stakeholders, such that national differences in these egalitarianism-related features may affect firms' international expansion decisions.