Cultural distance and cross-border replication of China Multinational Corporations

Zhi Wang, Bo Zhou, Stuart Horsburgh

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Abstract

The growing research interest in sociocultural issues in relation to global economic activity motivates this article to postulate a set of behavioural mechanisms that contribute to the debate on cultural distance and Multinational Corporations (MNC) cross-border replication production of economic activity. The empirical tests draw on a data base comprising 289 managers (R&D and product development professionals) employed by China MNC (CMNC) subsidiaries operating across 150 countries. First, the results reveal a negative relationship between cultural distance and CMNC cross-border replication. Second, the negative coefficients are moderated by social norms, reciprocity, and prosocial behaviours in cooperation. Finally, in using the moderator and mediator in the analysis, the results demonstrate that the mediator variables (capacity for cross-cultural adaptation, and language) positively lead to CMNC replication, and subsidiary operating years and managerial experience significantly moderate cultural distance. The findings support the model that contributes to the extant literature by demonstrating sociocultural determinants of economic growth.
Original languageEnglish
Pages (from-to)363-385
Number of pages23
JournalForum for Social Economics
Volume50
Issue number4
DOIs
Publication statusPublished - 15 Jul 2020

Keywords

  • CMNC
  • cultural distance
  • reciprocity
  • cooperation
  • replication
  • C83 Survey Methods,Sampling Methods, F23 Multinational Firms, International Business, O110/O120 Macroeconomic/Microeconomic Analyses of Economic Development

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