The Effect of Home-Country Culture on Cross-Border Nonmarket Strategy: Egalitarianism and Lobbying in the United States
58 Pages Posted: 10 Dec 2018 Last revised: 11 Oct 2021
Date Written: October 9, 2021
This paper examines how home-country cultural orientation drives foreign firms’ political strategy in a host country. Prior studies have identified several contributory factors considered to drive firms’ political strategies. Yet much of the variation in firms’ political strategies remains unexplained. Based upon international business studies that home-country culture is among the most important drivers of strategic heterogeneity when firms operate abroad, we argue that home-country beliefs around egalitarianism—the socially equitable and transparent use of market and political power—are a strong predictor of foreign firms’ political strategies in a host-country market. Empirically, we look at formalized lobbying with mandated disclosure in the United States by non-U.S. firms and find strong support for our theory. We also find that home-country legal institutions and norms pertaining to egalitarianism have a moderating effect. This study contributes to the global strategy and nonmarket strategy literatures.
Keywords: Cross-Cultural Studies, Nonmarket/Political Environment, International Business
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