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The Impact of Cultural Distance on MNEs’ Performance: Focusing on “China-Specific” Capabilities of TMT

최성진|왕설가
한국국제경영학회 (Korean Academy of International Business)|2018.05|국제경영연구 (International Business Journal)|제29권 제2호|pp. 39-72|DOI http://dx.doi.org/10.14365/ibj.2018.29.2.2

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키워드

교육educationCultural distance귀환자returneepolitical connectionsChina-specific capability문화거리중국 특색 역량정치 연관
주제분류경영학

초록

Extant studies have proposed that cultural distance is closely related with performance of multi- national enterprises (MNEs). Based on the literature, this research explores the research questions when and how MNEs’ liability of foreignness caused by cultural distance can be mitigated with locally capable top management team (TMT). In particular, the paper proposes three China-specific interactions, 1) returnee manager , 2) educational background , and 3) political connections of top management team. With data on 102 foreign-invested enterprises in China, this research finds positive moderating roles of TMT which possesses China-specific local capabilities. The implication of the study is that cultural diversity between two different country contexts is an important obstacle for the performance of MNEs and those with oversea-experienced, highly-educated, and politically- connected TMT managers can relieve this disadvantage. Our studies may contribute to the management studies by providing practical tools to avoid liability of foreignness in emerging market.

Abstract

Extant studies have proposed that cultural distance is closely related with performance of multi- national enterprises (MNEs). Based on the literature, this research explores the research questions when and how MNEs’ liability of foreignness caused by cultural distance can be mitigated with locally capable top management team (TMT). In particular, the paper proposes three China-specific interactions, 1) returnee manager , 2) educational background , and 3) political connections of top management team. With data on 102 foreign-invested enterprises in China, this research finds positive moderating roles of TMT which possesses China-specific local capabilities. The implication of the study is that cultural diversity between two different country contexts is an important obstacle for the performance of MNEs and those with oversea-experienced, highly-educated, and politically- connected TMT managers can relieve this disadvantage. Our studies may contribute to the management studies by providing practical tools to avoid liability of foreignness in emerging market.

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