Are You Free From Your Home? Cross-National Cultural Distance and Strategic Lobbying Behavior
Posted: 10 Dec 2018
Date Written: November 16, 2018
Home-country cultural norms and beliefs have been shown in the management literature to influence firms’ choices of investment locations and entry modes. Yet relatively little is known about the effect of home-country cultural norms and beliefs on firms’ strategic behaviors when operating in a foreign market. Given the importance of cultural factors in the investment decision-making process, this is a critical omission. We try to address this gap by examining how egalitarianism influences managers’ daily behavior, and by showing the effect of cultural distance on firms’ strategic-behavioral decisions. This study focuses on the decisions of foreign firms operating in the United States to lobby the U.S. government. We find support for our theory that home-country cultural beliefs about egalitarianism have a first-order influence on such firms’ strategic choices to engage in lobbying. The results are robust to the use of instrumental variables, and the results confirm our arguments that cross-national cultural distance affects foreign subsidiaries’ strategic decisions made in a host country. This study contributes to the study of culture, international business, and nonmarket strategy.
Keywords: Culture, egalitarianism distance, corporate political lobbying, foreign subsidiaries
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