International Journal of Management Reviews, Vol.

00, 1–20 (2015)

DOI: 10.1111/ijmr.12070

International Business and National

Culture: A Literature Review and
Research Agenda
Cristina López-Duarte, Marta M. Vidal-Suárez and Belén González-Dı́az1
Department of Business, University of Oviedo, Spain, and 1 Department of Accountancy, University of Oviedo, Spain
Corresponding author email: clduarte@uniovi.es

This literature review analyzes leading international business and management journals
from 2000 to 2012 in order to explore the role of national culture in international business
research. Through the analysis of the 265 selected articles, the study thematically maps
the field and identifies research challenges and opportunities. It reflects on avenues
for future research related to both thematic and methodological issues, among them:
research focused on the impact of the home/host national culture on internationalization
processes (as existing literature mainly focuses on cultural distance); the role to be played
by new theoretical frameworks; and the need to consider cultural positions and cultural
friction rather than traditional cultural distance when analyzing internationalization
decisions.

Introduction and drawing on Hofstede (1980), House et al. (2004)

International business (IB) research has grown sig-
nificantly in recent years. As a consequence, a con-
siderable effort has recently been devoted to mapping
this field, summarizing trends, patterns and schools,
analyzing main research methodologies and ranking
key journals, among the most recent being Acedo and
Casillas (2005), Chan et al. (2006), Pisani (2011) and
Yang et al. (2006).
As IB is concerned with ‘firm-level business activ-
ity that crosses national boundaries or is conducted in
a location other than the firm’s home country’ (Wright
and Ricks, 1994), national culture (NC) arises as a key
factor conditioning not only the decision of interna-
tionalization, but also the choice of host countries, the
selection of entry mode strategies, the international-
ized firms’ organizational design, transfer of knowl-
edge and management of human resources, as well
as the final performance of the process. In this sense,
Financial support from Spain’s Economy and Competitive-
ness National Department (Project: ECO2013-41762-P) is
gratefully acknowledged.
and Schwartz (1999), NC refers to shared collective
values that make diverse (national) human communi-
ties different or similar, and to the reasons underlying
these differences.
Although the analysis of the impact of NC and
cultural distance (CD) on different IB decisions has
emerged as a central topic, there are only a few studies
aimed at reviewing the extant literature dealing with
this issue, i.e. Harzing (2003) and Shenkar (2001).
We seek to address this limitation by developing a
review of the role of NC/CD in IB research published
in top and highly specialized journals. The purpose
of this is twofold: (1) to map the field by identify-
ing not only core research streams and main con-
clusions, but also the main contributors to the field,
types of papers, measurements of NC/CD and empir-
ical methodologies; and (2) to explore gaps in the ex-
tant literature and identify research opportunities and
challenges.
The paper is organized as follows: the next section
describes the methodology used in the review pro-
cess, while the following one discusses the main find-
ings. The paper concludes with a reflection focused


C 2015 British Academy of Management and John Wiley & Sons Ltd. Published by John Wiley & Sons Ltd, 9600 Garsington
Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
2 C. López-Duarte et al.
on the identification of research avenues for future
studies.
Methodology
Following Christoffersen (2013) and Meier (2011),
this research was carried out in four steps.
Planning the review
Our work started by establishing a protocol for devel-
oping a systematic, transparent and replicable pro-
cess, which implies focusing the review, delimiting
the intended period of study and identifying the type
of articles to be analyzed and the journals to be
searched.
Focusing the issue. This research is centered on
studies that belong to ‘pure international busi-
ness/management research’ (Wright and Ricks,
1994). It gathers studies that focus on firm-level
business activity and management decisions in in-
ternational contexts. Comparative studies (aimed at
comparing local business practices across different
countries), literature reviews and articles dealing
with methodological issues relative to NC/CD mod-
els/measurements in IB literature1 are not included in
this research.
Period of study. As our objective was to analyze the
current state of research, we circumscribed the study
to recent articles published between 2000 and 2012.
Type of articles. We focused exclusively on full-
length articles published in academic journals, as they
are considered to be validated knowledge (Podsakoff
et al., 2005; Ramos-Rodrı́guez and Ruı́z-Navarro,
2004). Therefore, we have not taken into account ed-
itorials, commentary essays, book comments, book
chapters or conference proceedings.
Selected journals. We followed Lu (2003) and
Schmid and Kretschmer (2010), reviewing both man-
agement and IB journals, restricting our search to
top or high-impact ones. As a starting point, we re-
viewed the list of the 20 top academic management
journals initially derived from the research by Gómez-
Mejı́a and Balkin (1992) and later adapted by Pisani
1 2
For example, Brewer (2007) and Dow and Karunaratna
(2006).

C 2015 British Academy of Management and John Wiley & Sons Ltd.
(2011) and Werner (2002). This is a comprehensive
list, which has recently been used by Judge et al.
(2007) in their analysis of causes that favor a man-
agement article to be cited. Only one of the journals
ranked in this list specializes in IB – the Journal of
International Business Studies. We then selected the
core journals in the particular field of IB, following
Acedo and Casillas (2005), Chan et al. (2006) and
DuBois and Reeb (2000). Table 1 shows the final list
of journals searched.
Conducting the review
Initial identification. A keyword search using the
Institute for Scientific Information’s (ISI) Web of
Knowledge and Scopus databases was performed.
Through this search we identified all articles in-
cluding the following words in their title, abstract,
or keywords: ‘acculturation’, ‘cross-country’, ‘cross-
cultural’, ‘cross-national’, ‘culture’ (this term was en-
tered as ‘international culture’ for management jour-
nals), ‘cultural distance’, ‘cultural differences’ and
‘psychic distance’.
Selection of articles. We conducted a qualitative
analysis based on at least two researchers’ reading
an interpretation of these abstracts in order to decide
whether the identified articles actually addressed our
intended issue. In about 30% of cases, it became nec-
essary to read the full article to make a decision.
We finally found that 265 articles were relevant
for this research (Supporting Information, Appendix
S1). An Excel workbook was then prepared, recording
some basic data relative to these articles (authors,
journal, etc.).
Analysis
These articles were fully read, analyzed, coded and
classified by the research team. For each individual
article, the following information was analyzed: type
of paper (conceptual/empirical); key arguments; the-
oretical framework; and focus (home/host’s NC vs
CD). In the particular case of empirical articles, we
also analyzed information relative to NC/CD mea-
surement, empirical methodology, sample’s features
and empirical results.
Following the traditional strategy–structure
paradigm applied to international firms,2 articles
See Gupta and Govindarajan (1991, 2000) for exhaustive
reviews on this point.
International Business and National Culture 3

Table 1. Breakdown of identified articles by source journal

Published articles 2000–2012 Identified articles 2000–2012

Management Journals
Academy of Management Journal 832 6
Academy of Management Review 395 1
Administrative Science Quarterly 229 1
Decision Sciences 376 1
Human Relations 813 8
Industrial & Labor Relations Reviewa 413 0
Industrial Relations 418 0
Journal of Applied Behavioral Sciencea 309 2
Journal of Applied Psychology 1381 2
Journal of Management 554 2
Journal of Management Studies 786 6
Journal of Occupational and Org. Psychology 490 0
Journal of Organizational Behavior 689 1
Journal of Vocational Behavior 965 0
Management Science 1789 0
Organizational Behavior & Human Decision Processes 671 1
Personnel Psychology 339 0
Psychological Bulletin 591 0
Strategic Management Journal 897 3
Total 12,937 34
International Business Journals
International Business Review 586 50
International Marketing Review 410 19
Journal of International Business Studies 663 59
Journal of International Management 337 24
Journal of International Marketing 270 9
Journal of World Business 464 42
Management International Reviewa 417 28
Total 3147 231
a Journals not available in these databases for some particular years. Direct search in the journals’ archives for those particular years.

were classified in three first-order research streams
(see Figure 1): internationalization growth decision;
entry mode strategy; and structure/managing of the
multinational firm (MNE). While the first stream
gathers articles dealing with the corporate strategic
decision to grow in an international context, the
second stream deals with the choice of foreign market
entry mode, which is a key strategic decision for a
firm seeking to grow internationally (Brouthers and
Hennart, 2007). Entry modes can be broadly grouped
in exports, different types of alliances or cooperative
agreements and foreign direct investments (FDIs),3
these three representing second-order categories
within the second stream. The analysis of particular
issues within each stream gives rise to third-order
categories, some of them being specific within a
particular stream (i.e. establishment mode in a FDI),
some arising transversally across different streams
3
See Brouthers and Hennart (2007).
(i.e. choice of host country, performance). Our
third stream gathers articles related to the structure
and organizational design of MNEs, headquar-
ters/subsidiaries relationship, international human
resource management and international transfer of
knowledge.
Two different researchers read and analyzed the
first 25 articles in order to compare their interpreta-
tions, analyses and classification, as well as to check
the list’s suitability for our research. The categoriza-
tion process was not always straightforward, as some
articles potentially fell within different categories or
dealt with more than one issue. The research team
made decisions relative to these cases so that each
article is categorized in just one group. From this
point, each paper was coded by just one team mem-
ber. However, in order to ensure the reliability of the
codification process, researchers shared results after
every 25 papers. In case of doubts or not straightfor-
ward coding (about 15% of the papers), the article


C 2015 British Academy of Management and John Wiley & Sons Ltd.
4 C. López-Duarte et al.
Figure 1. Map of the field (the references cited in this figure are given in full in Appendix S1)
was independently read and coded by the three team
members, analyzing and resolving discrepancies.
Results
Journals, authors and type of articles
Just three journals accumulate more than 60% of
the total number of selected articles: Journal of In-
ternational Business Studies, International Business
Review and Journal of World Business. The 265 ar-
ticles were authored by 523 researchers. Following
Lu (2003) and Morrison and Inpken (1991), we ex-
amined both the total and adjusted contributions by
each author (the latter takes into account the number
of different co-authors in an article). Over 80% of
identified authors contributed only once (total con-
tribution), pointing to a wide variety of researchers
working on the field, but only a few being able to
publish consistently in the selected top journals. Ta-
ble 2 reports the most prolific contributors to the field.
To assess the impact of the 265 articles, we con-
ducted a citation analysis up to 31 December 2013, us-
ing the Scopus database. This type of analysis allows
identification of the most influential articles, authors

C 2015 British Academy of Management and John Wiley & Sons Ltd.
and journals within the field (i.e. Li and Tsui, 2002;
Quer et al., 2007): However, it does not do justice to
articles published most recently; therefore, we pre-
sented the citation results in two sub-periods: 2000–
2006 and 2007–2012. Table 3 reports the list gather-
ing the 15 most cited articles within each sub-period.
In addition, Figure 1 collects the two most cited ar-
ticles within each particular research sub-stream the
study. Even though it was published in the later sub-
period, Johanson and Vahlne’s (2009) review of their
sequential internationalization process is the most fre-
quently cited article.
Focus, measurements, samples and empirical
methodologies
More than 80% of the articles deal with the role of
CD in internationalization decisions; therefore, the
impact of the home or host nation NC has scarcely
received any attention. Although a few themes have
been addressed with a NC perspective (i.e. its influ-
ence on the choice of governance methods in alliances
and affiliates), a wide range of internationalization
decisions remain almost unexplored. Among these
is a particularly relevant one: What are the cultural


International Business and National Culture

C 2015 British Academy of Management and John Wiley & Sons Ltd.

Table 2. Individual contributions: most prolific authors

Total Adjusted
Author contribution Institution Author contributions Institution

Luo, Yadong 11 University of Miami Luo, Yadong 8.6 University of Miami

Sun Yat-Sen University Sun Yat-Sen University
Cavusgil, S. Tamer 8 Michigan State University Slangen, Arjen 3.6 Erasmus University Rotterdam
Georgia State University University of Amsterdam
Griffith, David A. 7 University of Hawaii Ellis, Paul 3 Hong Kong Polytechnicx University
Michigan State University
University of Oklahoma
Shenkar, Oded 7 Ohio State University Griffith, David A. 2.9 University of Hawaii
Michigan State University
University of Oklahoma
Slangen, Arjen 7 Erasmus University Rotterdam Shenkar, Oded 2.4 Ohio State University
University of Amsterdam
Demirbag, Mehmet 5 The University of Sheffield Cavusgil, S. Tamer 2.2 Michigan State University
Georgia State University
Glaister, Keith W. 5 The University of Sheffield Brock, David M. 2.1 University of Auckland
Ben-Gurion University
Bar-Ilan University
Stahl, Günter K. 5 INSEAD Reus, Taco 2 Erasmus University Rotterdam
Vienna University of Economics &
Business Administration
Tatoglu, Ekrem 5 Bahcesehir University Richards, Malika 2 Michigan State University
Penn State University-Berks
Drexel University
Brock, David M. 4 University of Auckland Schlegelmilch, Bodo B. 1.8 Vienna University of Economics &
Ben-Gurion University Business Administration
Bar-Ilan University
Richards, Malika 4 Michigan State University Stahl, Günter K. 1.7 INSEAD
Penn State University-Berks Vienna University of Economics &
Drexel University Business Administration
Schlegelmilch, Bodo B. 4 Vienna University of Economics & Demirbag, Mehmet 1.6 The University of Sheffield
Business Administration
Sinkovics, Rudolf R. 4 University of Manchester Glaister, Keith W. 1.6 The University of Sheffield
Vaara, Eero 4 Hanken School of Economics Tatoglu, Ekrem 1.6 Bahcesehir University
Emlyon Business School

5
 6
Table 3. Most cited articles: two sub-periods breakdowna

2000–2006 2007–2012

Total citations/ Total citations/

excluding excluding
Rank Article Journal self-citationsb Rank Article Journal self-citations

1 Caligiuri (2000) MIR 174/164c 1 Johanson and Vahlne (2009) JIBS 237/231
2 Tihanyi et al. (2005) JIBS 171/165 2 Björkman et al. (2007) JIBS 75/67
3 Brouthers and Brouthers (2001) JIBS 134/131 3 Filatotchev et al. (2007) JIBS 67/55
4 Delios and Henisz (2003b) SMJ 128/119 4 Stahl et al. (2010) JIBS 57/52
5 Pothukuchi et al. (2002) JIBS 124/121 5 Barkema and Drogendijk (2007) JIBS 54/53
6 Evans and Mavondo (2002) JIBS 104/101 6 Katsikeas et al. (2009) JIBS 49/46

C 2015 British Academy of Management and John Wiley & Sons Ltd.

7 Zhang et al. (2003) JIBS 94/86 7 Wu et al. (2007) JIBS 47/40

8 Luo (2001) ASQ 92/78 7 Shenkar et al. (2008) AMR 47/43
9 Skarmeas et al. (2002) JIBS 90/85 8 Ellis (2008) JIBS 46/45
10 Waldman et al. (2006) JIBS 87/79 9 Slangen et al. (2009) IBR 45/44
11 Shimizu et al. (2004) JIM 84/78 10 Tong and Reuer (2007) JIBS 41/37
11 Takeuchi et al. (2005) AMJ 84/80 11 Chakrabarti et al. (2009) JIBS 40/38
12 Makino and Neupert (2000) JIBS 80/78 12 Reus and Lamont (2009) JIBS 37/34
13 Gong (2003) AMJ 75/71 12 Berry et al. (2010) JIBS 37/37
14 Larsson and Lubatkin (2001) HR 74/73 13 Vora and Kostova (2007) JOB 35/35
14 Johnson et al. (2006) JIBS 74/74 13 Slangen and Hennart (2008) JIBS 35/30
15 Delios and Henisz (2003a) JIBS 71/68 14 Hutzschenreuter and Voll (2008) JIBS 34/28
15 Ojala and Tyrväinen (2007) JIMk 32/24
15 Morschett et al. (2010) JIM 32/31

Source: Scopus, 2000–2013.

a The references cited in this table are given in full in Appendix S1.
b Citations count up to 31 December 2013.

C. López-Duarte et al.
c Source: Google Scholar (checked to meet Scopus’ requirements, as Scopus is not available for MIR-2000).
International Business and National Culture 7

Table 4. Internationalization growth decisiona

Sub-category Articles

Choice of host country Clark and Pugh (2001), Douglas and Craig (2011), Gaston-Breton and
Martı́n (2011), Ojala and Tyrväinen (2007), Sakarya et al. (2007)
Internationalization process (stages, Barkema and Drogendijk (2007), Hutzschenreuter et al. (2011), Johanson
sequence and features) and Vahlne (2009), Mezias et al. (2002), Pogrebnyakov and Maitland
(2011)
Performance Evans and Mavondo (2002), Hutzschenreuter and Voll (2008), Mas et al.
(2006)
a The references cited in this table are given in full in Appendix S1.

dimensions conditioning international growth deci- A thematic map of the field

sions and international entrepreneurship processes?
Research Stream 1: Internationalization growth
Regardless of its critics and ‘hidden assumptions’
decision. Articles within this stream have been
(Shenkar, 2001), Kogut and Singh’s (1988) index
classified in threee different subcategories (Table
based on Hofstede’s (1980) cultural dimensions re-
4). The first group of articles focus on the firm’s
mains the CD measurement most frequently used in
internationalization decision and its path, sequence
IB literature. A scarce 12% of the empirical papers
and timing; among them, the study by Johanson and
measure CD based on own decision-makers’ percep-
Vahlne (2009). This article is an update and develop-
tions. What is more, a particularly small number of pa-
ment of their seminal Uppsala Model, which points
pers supplement this traditional index by considering
to the role of network development and relationship
the fifth or sixth of Hofstede’s dimensions (Long Term
building as key factors moderating the role played by
Orientation, Indulgence/Restraint) or take into ac-
psychic and CD in internationalization decisions rel-
count the individual role of each particular dimension.
ative to the mode/sequence of access to host markets.
Integrating the different dimensions into one index
However, empirical research relative to this point is
implies an assumption of equivalence (Shenkar, 2001)
not so conclusive: although some articles provide em-
that does not have theoretical foundation or empirical
pirical evidence as to the role of the firm’s relational
support. About 8% of the papers analyzed use dif-
capital in diminishing the negative impact of CD
ferent measurements of CD (i.e. measurements based
on internationalization decisions within a particular
on the Hofstede, Globe and Schwartz models) point-
period of time, it seems that costs related to managing
ing to a contingent effect of CD, depending on the
those networks hinder further international expansion
measurement.
to new areas in subsequent periods. The validity of the
A scarce 15% of the empirical studies focus
Uppsala Model is also tested by articles that analyze
on internationalization decisions of firms coming
the internationalization process as a trade-off between
from emerging and/or Asian countries pointing
exploitation and exploration. These studies point to
to a clear Western bias (most of them focus on
combining two different types of internationalization
decisions carried out by US or Western European
processes: incremental processes, aimed at exploiting
firms). Among articles developing an empirical
the firm’s resources, and larger-step processes, which
analysis, those using quantitative methodologies are
lead to the exploration of new and culturally distant
the most frequent (85%), and about 13% carry out
markets, as well as to access to knowledge and
case studies. As a result, empirical analyses based
experience. The latter may result in lower initial
on qualitative methodologies different from case
performance, but lead to increased performance
studies show a marginal weight in the database. The
in further processes. However, empirical evidence
selection of journals reviewed can underlie both the
shows that high levels of added CD during one period
Western and the quantitative bias: on the one hand,
may hamper further international expansion because
any journal specially focused on management issues
of adjustment costs.
in Asian countries is included in the selected list;
The second sub-stream gathers the studies that an-
on the other, qualitative studies usually face greater
alyze the role of CD between the home and the target
difficulty getting published in these top-ranked
in the choice of host countries for internationaliza-
journals.
tion. Empirical analyses point to the role played by


C 2015 British Academy of Management and John Wiley & Sons Ltd.
8 C. López-Duarte et al.
CD through its interaction with economic develop-
ment, so that the greater the difference relative to the
degree of economic development between countries,
the lower the impact of CD. It seems that firms com-
ing from developed countries think of less-developed
countries as being in one category; therefore, cultural
differences between them become irrelevant. On the
contrary, in a context of similar economic develop-
ment between the home and the target, the CD be-
tween both of them plays a key role in the choice of
the latter as a host for the internationalization pro-
cess. Some articles that focus their analysis on small
and medium firms provide empirical evidence of a
negative correlation between CD and the choice of
a particular host country, irrespective of the firms’
international experience: these firms keep all their in-
ternationalization growth processes within a low CD
area, not only the early stages. Therefore, it seems that
the sequential internationalization model or Uppsala
Model is only partially applicable to this type of firm.
The last group of articles within this research
stream focus on the internationalization process per-
formance, pointing to the existence of time compres-
sion diseconomies related to the management of CD;
in other words, acculturation processes and learning
how to manage cultural diversity require a minimum
and non-reducible amount of time. In addition, the
greater the distance between cultures, the more time
needed to bridge it. Some empirical studies point to a
positive influence on performance of the interaction
between CD and the business diversification strategy.
Research Stream 2: Entry mode strategies.
Sub-stream 2a: Exports. Articles within this
research stream have been organized in two dif-
ferent groups: exports path and performance and
importer/exporter relationships (Table 5). The CD
between the home and the target seems to have more
negative effects on vertical exports (related to raw
materials or in-process products) than on horizontal
ones (finished goods and services), as well as on
exports carried out through owned subsidiaries –
the higher the CD, the higher the tendency to use
alternative export modes (i.e. trading companies,
agreements with local distributors). Recent literature
points to a positive relationship between cultural and
psychic distance and export performance. It seems
that firms entering culturally distant countries are
likely to perceive a greater need to learn about those
markets and to prepare themselves for managing

C 2015 British Academy of Management and John Wiley & Sons Ltd.
cultural diversity. In addition, the CD moderates the
relevance of the host country’s market size.
However, the CD hinders the successful devel-
opment of relationships between importers and ex-
porters by hampering both trust development and
communication processes between them. Cultural
distance does even negatively influence firms’ com-
mitment to the relationship and their willingness to
share knowledge or to carry out investments in assets
that are specific to the relationship.
Sub-stream 2b: Strategic alliances. This research
stream groups the studies that analyze the role of
CD and/or NC on alliances’ formation and features.
(Table 6).
When dealing with the alliance formation process,
it seems that firms’ accrued experience in cooper-
ating with partners coming from different countries
increases their tendency to develop new cooperative
agreements in culturally distant contexts. In addition,
existing literature clearly points to CD as a main con-
ditioner of the alliance’s strategic objectives, so that
the higher the CD, the higher the tendency to develop
alliances whose main objectives are simply commer-
cial (rather than innovation, production or research
and development).
The second group of articles relates to the alliances’
structure in terms of the choice between equity and
non-equity alliances. Although empirical evidence re-
lating to the role played by CD in this choice is far
from conclusive, some studies shed light on this issue
by analyzing how the impact of CD between two part-
ners depends on their location: CD’s impact is much
higher for the partner located in a third country than
for the partner located in the country in which the
shared project is going to be developed. In addition,
partners coming from countries that show low levels
of Uncertainty Avoidance and high levels of Power
Distance tend to prefer equity alliance modes, rather
than non-equity ones.
Articles within the management and governance
group analyze the role of cultural dimensions in the
choice of control and governance mechanisms. Most
of them deal with the role of trust as a governance
mechanism, which causes partners to behave in a co-
operative rather than in an opportunistic fashion. In
this way, cultural differences between partners hin-
der communication processes between them; this, in
turn, hampers trust development. As a consequence,
the higher the CD between two partners, the higher
the tendency to use formalized control mechanisms.
International Business and National Culture
Table 5. Entry mode strategy: exportsa
Sub-category
Path and performance
Importer/exporter relationship
a The references cited in this table are given in full in Appendix S1.
Table 6. Entry mode strategy: alliancesa
Sub-category
Alliance determinants
Structure
Management and governance
Performance
a The references cited in this table are given in full in Appendix S1.
b It also analyzes Human Resource Management.
Our last category deals with alliances’ perfor-
mance. Most of the studies point to a negative effect of
CD on performance: CD between partners increases
costs relating to knowledge transfer and conflict-
solving; therefore, CD diminishes the alliance’s per-
formance, particularly in the long term. Cultural dis-
tance also increases the partners’ exposure to risk and
decreases the efficiency of both learning procedures
and resource and capabilities development processes.
Sub-stream 2c: Foreign direct investments. This re-
search stream gathers a large group of articles related
to FDI that have been classified into five different
groups (Table 7). The first group gathers articles that

C 2015 British Academy of Management and John Wiley & Sons Ltd.
9
Articles
Chung et al. (2012), Ellis (2007, 2008), Evans et al. (2000), Parente et al.
(2010), Sichtmann and Von Selasinsky (2010), Slangen and Beugelsdijk
(2010), Slangen et al. (2011), Sousa et al. (2010), Wood and Robertson
(2000)
Ellis (2005), Griffith et al. (2000), Griffith et al. (2006), Ha et al. (2004),
Johnston et al. (2012), Katsikeas et al. (2009), Ketkar et al. (2012), Lee
et al. (2007), Liu (2012), Marshall (2003), Marshall and Boush (2001),
Nes et al. (2007), Roth et al. (2004), Shankarmahesh et al. (2004),
Sharma et al. (2006), Skarmeas et al. (2002), Slater and Robson
(2012a), Wu et al. (2007), Zaheer and Kamal (2011), Zhang et al. (2003)
Articles
Kaufmann and O’Neill (2007), Yeniyurt et al. (2009)
Ang and Michailova (2008), Cuypers and Martin (2010), Garg and
Rasheed (2003), Lee et al. (2008), Mayrhofer (2004), Richards and Yang
(2007), Yamin and Golesorkhi (2010)
Abdi and Aulakh (2012), Beugré and Acar (2008), Brannen and Salk
(2000), Bstieler and Hemmert (2008), Gong et al. (2001), Griffith et al.
(2009), Homburg et al. (2009), Jean et al. (2010), Kim and Kim (2000),
Kumar and Andersen (2000), Kumar and Nti (2004), Lin and Miller
(2003), Luo (2006, 2007a, 2007b), Muethel and Hoegl (2012),
Rodrı́guez (2005), Tjemkes et al. (2012), Wang et al. (2005), Zaheer and
Zaheer (2006), Zeybek et al. (2003)
Alexander (2012), Brouthers and Bamossy (2006), Chiao et al. (2009),
Delerue and Simon (2009), Evangelista and Hau (2009), Griffith (2002),
Hanvanich et al. (2003, 2005), Hennart and Zeng (2002), Hsieh et al.
(2010), Jean et al. (2010), Li et al. (2001)b , Li et al. (2002), Li et al.
(2012), Lin and Wang (2008), Luo (2001), Luo (2002), Luo (2005), Luo
and Shenkar (2002), Meschi and Riccio (2008), Ng et al. (2007),
Nielsen (2007), Nielsen and Gudergan (2012), Pak et al. (2009), Park
et al. (2012), Pothukuchi et al. (2002), Reus and Rottig (2009), Sirmon
and Lane (2004), Slater and Robson (2012b), Voss et al. (2006),
Yeheskel et al. (2001)
come to a definitive conclusion: the CD between the
home and the target discourages internationalization
through FDIs. When dealing with the choice of host
countries for investment, empirical evidence points
to a negative impact of some psychic distance ele-
ments (language, religion or economic development).
In addition, the host country’s national cultural di-
mensions play a key role, as empirical evidence in-
dicates that MNEs clearly prefer to invest in host
countries with a low degree of Uncertainty Avoid-
ance. In addition, this cultural dimension moderates
the impact of other factors conditioning the choice of
host country, such as the investor’s trust in the target
market.
10
Table 7. Entry mode strategies: FDIsa
Sub-category
Determinants of the FDI
Choice of host country
Ownership structure
Choice of establishment mode
Performance
a The references cited in this table are given in full in Appendix S1.
b It also analyzes establishment mode.
c It also analyzes FDI performance.
d It also analyzes human resource management
As shown in Table 7, the choice of entry mode
has been extensively researched. This sub-category
includes articles analyzing the foreign investor’s de-
gree of commitment to the FDI: the investor may in-
vest alone in the target market, keeping 100% of the
project’s equity – investment through a wholly owned
subsidiary (WOS) – or share the investment project
with (at least) a second partner – investment through a
joint venture (JV). It also incorporates studies dealing
with the ownership structure of the latter. Although
different theoretical frameworks have been used to
carry out these analyses, Transaction Cost and Insti-
tutional Theories are the dominant ones. Both the-
oretical developments and empirical evidence show
contradictory proposals/findings, giving rise to the
so-called ‘cultural distance paradox’ (Brouthers and
Brouthers, 2001). While some studies point to a pref-
erence for JVs in culturally distant contexts so as to
involve a local partner who provides access to spe-
cific resources such as local knowledge and contacts
related to the host market, others stress the role of
WOSs as entry modes that allow the foreign investor
to avoid cooperating with a partner whose decision

C 2015 British Academy of Management and John Wiley & Sons Ltd.
C. López-Duarte et al.
Articles
Feils and Rahman (2011), Makino and Tsang (2011), Malhotra et al.
(2009), Rothaermel et al. (2006), Thomas and Grosse (2001)
Berry et al. (2010), Bhardwaj et al. (2007), Delios and Henisz (2003a,b),
Dow and Ferencikova (2010), Zhao et al. (2003)
Arora and Fosfuri (2000), Blomstermo et al. (2006), Brouthers and
Brouthers (2001), Chari and Chang (2009), Cho and Padmanabhan
(2005), Demirbag et al. (2007a, 2009, 2010), Dow and Larimo (2009),
Filatotchev et al. (2007), Kang and Kim (2010), Kim and Gray (2008),
López-Duarte and Vidal-Suárez (2010), Makino and Neupert (2000),
Malhotra and Sivakumar (2011), Malhotra et al. (2011), Morschett et al.
(2008, 2010), Pak and Park (2004), Quer et al. (2007), Ragozzino
(2009), Schwens et al. (2011), Slangen and Van Tulder (2009), Somlev
and Hoshino (2005)b , Tihanyi et al. (2005)c , Tsang (2005), Wang and
Schaan (2008), Xu et al. (2004)d
Angwin (2001), Brock (2005)c , Demirbag et al. (2008), Dow and Larimo
(2011), Drogendijk and Slangen (2006), Fang et al. (2004), Krug and
Nigh (2001), Larsson and Lubatkin (2001), Reus (2012), Risberg (2001),
Shimizu et al. (2004), Slangen and Hennart (2008), Stahl et al. (2012),
Uhlenbruck (2004), Vaara et al. (2003), Zander and Zander (2010)
Aybar and Ficici (2009), Barmeyer and Mayrhofer (2008), Chakrabarti
et al. (2009), Demirbag et al. (2007b), Dikova (2009), Dikova et al.
(2010), Hutzschenreuter et al. (2011), Magnusson et al. (2008),
Nadolska and Barkema (2007), Pangarkar and Lim (2003), Reus and
Lamont (2009), Slangen (2006), Tong and Reuer (2007)
and behavioral rules are not well known and/or un-
derstood. It seems that the role played by CD becomes
less relevant when other differences (i.e. linguistic or
economic) are taken into account. In this way, some
researchers have focused their studies on the moder-
ating effect of third variables on the role played by
CD in the choice of mode of entry; among them, the
target’s country risk and differences relative to lan-
guage.
The home nation’s cultural dimensions seem to play
a key role in the choice of entry mode. In particu-
lar, empirical evidence is quite conclusive regarding
the role of the Power Distance dimension: the higher
the degree of Power Distance in the investor’s home
country, the higher the tendency to prefer WOSs over
cooperative investments.
Some studies that analyze CD’s influence on the
ownership structure of FDIs carried out through ac-
quistion lie between this group and the following one
(related to establishment mode). Once again, the re-
sults here are far from conclusive: while a group of
studies show that the greater the CD, the higher the
tendency to invest through full acquisitions in order to
International Business and National Culture
avoid sharing the investment with a culturally distant
partner, a second group points to partial acquisitions
as a way to control the investor’s risk exposure in cul-
turally distant contexts. However, empirical evidence
points to geographical distance as a moderator of the
impact of CD on this choice.
Our fourth group refers to the choice of establish-
ment mode – that is, the choice between a greenfield
investment (creating an entirely new firm from
scratch) and an acquisition when investing abroad
– as well as to the management of acquisition pro-
cesses. Empirical evidence is quite conclusive about
this choice: MNEs prefer to invest through greenfield
investments in highly culturally distant countries in
order to avoid the increased costs of acquisitions.
The higher the CD between the home and the target,
the higher the ex ante and ex post costs derived from
an acquisition. While ex ante costs are related mainly
to obtaining accurate information that allows the
investing firm to identify the true value of the target,
ex post acquisition costs relate to potential oppor-
tunistic behaviors by the seller, the need to integrate
into only one hierarchy the organization, structure
and personnel coming from two different companies,
and the risk of acquiring (and paying their market
value) resources that the investing firm does not need.
However, the preference for greenfield investments
may be moderated (even fully negated) by the foreign
investor’s accrued experience in the host market.
Once again, the influence of CD on the establish-
ment mode diminishes when additional differences
between the home and the target (i.e. linguistic or
economic differences) are included in the analysis.
Our last category relates to the influence of CD on
FDI performance. As a starting point, it has to be said
that the investments’ performance has been addressed
through quite heterogeneous measurements (return
on investment, survival, risk exposure and stock mar-
ket reaction, among others). Articles analyzing FDI
performance in terms of the investor’s risk exposure
conclude that the higher the CD, the higher the risk
faced by the foreign investor. Research is also con-
clusive when analyzing the stock market’s reaction
to FDI (how these processes increase shareholders’
wealth): abnormal returns are higher in culturally dis-
tant countries. Anyway, the foreign investor’s accrued
experience is a key moderator of CD’s impact on FDI
performance.
Research Stream 3: MNE structure and management.
Four different groups have been identified within this
research stream (Table 8). A group of studies within

C 2015 British Academy of Management and John Wiley & Sons Ltd.
11
the first sub-stream analyze the impact of the host
country’s cultural dimension on the subsidiary’s ex-
ploitation/exploration abilities, as well as on its sub-
sequent performance. Some of these studies analyze
the impact of managers’ NC on the political strate-
gies they formulate in host countries – related, for
instance, to their attitude towards financial induce-
ments or relationships with policy-makers. Finally,
studies dealing with CD show its positive influence
on subsidiaries’ degree of assertiveness in their local
markets.
Our second group deals with the role of cultural
dimensions and CD in organizational design and
MNE structure (centralization degree, control mech-
anisms). The MNEs from high Power Distance coun-
tries show a lower tendency to decentralize decision-
making, while high degrees of Uncertainty Avoidance
result in strongly formalized processes and methods.
While the CD between the home and the target does
not significantly influence the degree of centraliza-
tion in decision-making processes, it has a negative
impact on the use of trust as a substitute for formal-
ized control mechanisms.
Articles dealing with the role of CD in organiza-
tional change and development stress the relevance of
the workplace culture that mediates between global
corporate culture and subsidiaries’ NCs. Subsidiary
managers in MNEs follow a dual organizational iden-
tification, insofar as they feel part of both the MNE
and the subsidiary, so that they partially identify with
their respective NCs. In this line, some articles em-
phasize the idea of cultural friction, which takes into
account interaction between parties; therefore, it is
contingent on the contextual organizational factors in
which the interactions takes place.
Our third group is related to human resource man-
agement in MNEs and subsidiaries. A large propor-
tion of articles within this line deal with expatriates’
selection, management, and performance. The MNEs
from countries that rank high in Power Distance (Hof-
stede model) or Assertiveness (GLOBE model) prefer
expatriates rather than local employees in managing
subsidiaries. The CD between the home and the tar-
get also increases the tendency to use expatriates,
although the MNE’s experience in the host country
seems to moderate this relationship. Local employees
of MNEs (vs expatriates) display a variety of cultural
profiles more or less reflective of the NC, depend-
ing on their stance towards the native culture and on
the cultural orientation of the MNE. Therefore, they
emerge as a special group within the host country,
and they are not always culturally interchangeable
12
Table 8. Structure/managing of the MNEa
Sub-category
Headquarters/subsidiaries
relationship, strategy and
performance
Structure, organizational design and
development
Human resource management
Knowledge transfer
a The references cited in this table are given in full in Appendix S1.
with the rest of the host-country population. Immi-
grant employees also constitute a special group, as
they may help to bridge cultural and linguistic barri-
ers between the MNE and its subsidiaries.
When dealing with expatriate performance, the lit-
erature points to three different adjustment processes
as key factors: work adjustment – technical skills, de-
gree of responsibility, etc.; social adjustment – inter-
action, communication and socialization with locals;
and personal adjustment – general adjustment apart
from work-related adjustment (i.e. eating and housing
habits). Cultural differences moderate the role played
by accrued experience and technical skills on expatri-
ates’ performance. It seems that the expatriates’ effort
and ability in adjusting themselves to the host culture
are key factors underlying successful management.
Expatriates should follow a gradual dual adjustment
process that allows them to manage cultural discor-
dances and to adopt cultural patterns that are different
(and sometimes conflicting with) their own. ‘Hy-
bridization’ is the term used in this literature to refer
to the development of new management systems in
C. López-Duarte et al.
Articles
Ambos and Schlegelmilch (2008), Barron (2011), Brock et al. (2000), Campbell et al.
(2012), Jones and Davis (2000), Ling et al. (2005), Luo (2004), Yu et al. (2009)
Ambos and Schlegelmilch (2004), Andrews and Chompusri (2001), Chen and
Tjosvold (2005), Cohen and El-Sawad (2007), Dimitratos et al. (2011), Drogendijk
and Holm (2012), Fenwick et al. (2003), Geppert et al. (2003), Giacobbe-Miller
et al. (2003), Koveshnikov et al. (2012), Luo and Shenkar (2011), Manev and
Stevenson (2001), Matten and Geppert (2004), Moore (2003), Noorderhaven and
Harzing (2003), Paterson and Brock (2002), Prashantham and Floyd (2012), Rao
(2012), Raz (2009), Richards (2000), Shenkar et al. (2008), Sinkovics et al. (2011),
Vora and Kostova (2007), Williams and Van Triest (2009)
Barinaga (2007), Brock et al. (2008), Buck et al. (2010), Caligiuri (2000), Camiah and
Hollinshead (2003), Caprar (2011), Chen et al. (2010), Cheng and Lin (2009),
Chevrier (2003), Chung et al. (2010), Crossland and Hambrick (2011), Demir and
Söderman (2007), Fee and Gray (2012), Ferner et al. (2001), Freeman and Lindsay
(2012), Gamble (2006), Gómez (2004), Gong (2003), Goodall and Roberts (2003),
Hartmann et al. (2010), Heikkilä and Smale (2011), Janssens (2001), Janssens et al.
(2006), Johnson et al. (2006), Jun and Gentry (2005), Jun et al. (2001), Kim and
Slocum (2008), Maertz et al. (2009), Mäkelä et al. (2010), Maloney and
Zellmer-Bruhn (2006), Mense-Petermann (2006), Peltokorpi (2007), Peltkorpi and
Froese (2012), Ramsey (2005), Roth et al. (2011), Shimoni (2011), Soltani and
Wilkilson (2011), Stahl and Caligiuri (2005), Stahl et al. (2010), Takeuchi et al
(2005), Takeuchi et al. (2007), Testa et al. (2003), Thang et al. (2007), Thite et al.
(2012), Tröster and Knippenberg (2012), Van Vianen et al. (2004), Waldman et al.
(2006), Wang and Nayir (2006), Wilkinson et al. (2008), Wu et al. (2008), Zander
et al. (2011)
Ambos and Ambos (2009), Apfelthaler et al. (2002), Björkman et al. (2007), Cui et al.
(2006), Dinur et al. (2009), Engerlhard and Nägele (2003), Sarala and Vaara (2010),
Schlegelmilch and Chini (2003), Vaara et al. (2012), Yang (2005)
which different NCs interact. A major challenge for
expatriates is successfully managing communication
patterns and processes; therefore, linguistic skills also
play a key role in their adjustment and performance.
Expatriates’ cross-cultural motivation – their will-
ingness to learn about new cultures and face cultural
challenges – also arises as a key factor underlying
their work and personal adjustment. However, this
motivation is affected by the CD between the expatri-
ate’s home country and the host nation. In addition,
the host nation’s individual cultural dimensions may
potentially influence the expatriate’s assignment ef-
fectiveness, as they may condition his/her discretion
to make decisions – it seems that the higher the Indi-
vidualism and the lower the Uncertainty Avoidance in
the host country, the higher the expatriate’s discretion.
Articles dealing with the above referred individual or
general adjustment of expatriates stress the negative
role played by CD in family issues related to adjust-
ment processes – including potential work-related
problems for other family members, difficulties in
school attendance and so on. Therefore, the higher

C 2015 British Academy of Management and John Wiley & Sons Ltd.
International Business and National Culture
the CD, the more necessary the development of a
social network within the host country.
Management of global or multicultural teams is
also an important topic within this sub-stream. Stud-
ies point to the global mindset as a requirement to
enter a global team: team members should be aware
of the existence of cultural diversity, be willing to
understand different values and behaviors, and keep
an open-minded attitude towards learning and devel-
oping new experiences and values. Cultural diver-
sity may result in integration difficulties and even in
conflicts among team members; however, if correctly
managed, it may also bring to the group different
values, perspectives and behaviors that enhance the
group’s creativity and its problem-solving capacity.
In order to be able to work successfully with people
coming from different cultures, team members should
develop so-called intercultural competencies, which
imply integrating personal attributes (flexibility and
perseverance, among others), capabilities (skills), at-
titudes – and knowledge – relative to the existence
of cultural differences and relative to other members’
cultural values. These intercultural competencies in-
hibit cultural clashes and help to manage conflicts
among team members.
The literature has also extensively analyzed to
which point human resource policies are transferable,
although these analyzes show an important Western
bias. Some studies point to the need for adjustment
of human resource policies and practices to local cul-
tures, in particular in host Asian countries, as Long
Term Orientation and tendency to Restraint rather
than to Indulgence (cultural dimensions in Hofstede
model) are much more salient there than in Western
countries. It is also important to take into account the
dynamic aspects of the process: it is to be expected
that the local employees’ values and behaviors do not
remain static, insofar as they follow an acculturation
process adjusting their values (at least to some de-
gree) to the MNE’s culture. Particularly interesting
are the studies that analyze the acculturation process
based on linguistic differences. These studies show
that local MNE employees think and behave in differ-
ent ways, depending on the language they are using
in their interactions. Therefore, the correct selection
of the functional language within the MNE and its
subsidiaries arises as an important issue.
The last group within this category relates to
knowledge transfer between the MNE and its sub-
sidiaries. The literature is quite conclusive on the
negative effect of cultural differences on knowledge
transfer and its applicability across borders. The

C 2015 British Academy of Management and John Wiley & Sons Ltd.
13
strength of this negative impact depends on the par-
ticular mechanisms used to carry out the transfer
– personal mechanisms seem to be the least effec-
tive in high culturally distant contexts. A final group
of works within this particular sub-stream deal with
knowledge transfer between different units in merger
and acquisition. Empirical evidence shows a positive
effect of CD on knowledge transfer between units: the
higher the CD between the acquirer and the acquired,
the larger the synergies derived from complemen-
tary knowledge, routines and work patterns, and the
lower the probability of duplicating assets. Cultural
integration between both firms may be carried out
through convergent or crossvergent processes. The
first implies softening cultural differences between
both firms, so that they come closer to each other,
while the second implies creating a new cultural sys-
tem for the integrated unit.
Reflections and avenues for future
research
This review shows that there is a wide range of top-
ics focusing on the impact of NC/CD issues on IB
decisions already analyzed in the existing literature.
However, it also identifies challenges and opportu-
nities for researchers as disentangling existing con-
tradictions, applying new theoretical frameworks or
covering gaps related to internationalization decisions
that can be particularly relevant for firms and policy-
makers. Anyhow, it has to be emphasized that our
literature review is focused on research published
exclusively in top-tier journals. Therefore, both the
identified map of the field and the portfolio of new
research avenues are influenced by this approach.
First, the bulk of the analyzed studies focus on
the impact of CD on internationalization decisions.
However, research dealing with the impact of the
home/host national cultural dimensions on these pro-
cesses is scarce. The study of the role of some home
cultural dimensions on both international growth de-
cisions and international entrepreneurship arises as an
interesting field of research not only for academics,
but also for practitioners and policy-makers. In partic-
ular, studies addressing the differentiated role played
by cultural issues in the internationalization process
of Born Global Firms or International New Ventures
(Cavusgil and Knight, 2015; Ojala, 2015), as well as
in their incremental expansion and evolution (Johan-
son and Martı́n Martı́n, 2015) are needed.
14
The majority of studies analyzed tend to focus on
comparing cultures at the country level, assuming
cultural homogeneity within each country’s borders
and ignoring the existence of different within-country
sub-cultures (i.e. sub-cultures based on the ethnicity
of origin, language or geographic location). Interna-
tional business research should draw on other disci-
plines (i.e. economic geography, sociology) to recog-
nize that cultures are not necessarily bound by borders
and advance in considering the fact that NCs con-
sist of various and differentiated levels (McSweeney,
2002, 2009; Tung, 2008; Tung and Verbeke, 2010).
Among others, the studies by Kaasa et al. (2013),
Sasaki and Yoshikawa (2014) and Tung (2008) an-
alyzed the existence of salient cultural differences
within country boundaries (at regional/local levels),
so that intra-national diversity is sometimes wider
than diversity between countries. Therefore, not only
the different and multiple layers of ‘national’ cultures,
but also their interrelationships (Kirkman et al., 2006)
have to be taken into account. This interplay should
consider not only country and intra-country cultures,
but also organizational, and even occupational and
professional ones (Kirkman et al., 2006; McSweeney,
2009). In other words, an IB actor making a deci-
sion related to an internationalization process faces
a multi-level (i.e. country, region, organization) and
multi-interaction host cultural setting. Even more,
as recently shown by Chidlow et al. (2015), within-
country differences condition not only pre-entry inter-
nationalization decisions, but also post-entry choices
related to subsidiary development and relocation.
This review allows us to conclude that this field
is characterized by theoretical underdevelopment as
(1) the majority (up to 60%) of the reviewed articles
do not draw on a theoretical framework, and (2) the
range of theoretical approaches used is quite narrow
– Transaction Cost Theory, Institutional Theory, Up-
psala Model and Resource-based View clearly dom-
inate this literature. We call for the application of
additional theoretical approaches in future research,
among them the Co-evolution, the Upper-Echelon
and the Real Option theories.
First, we think a relevant role is to be played by
evolutionary models that place the emphasis on time,
dynamism and organizations’ interactions. Irrespec-
tive of the fact that internationalization is a process
that occurs over time, the IB literature has followed
a mainly static approach (Casillas and Acedo, 2013;
Welch and Paavilainen-Mäntymäki, 2014), and the
way in which culture has been addressed in this lit-
erature is not an exception to this static perspective.

C 2015 British Academy of Management and John Wiley & Sons Ltd.
C. López-Duarte et al.
Actually, one of the most salient flaws in the existing
literature is the assumption that NCs remain stable
over time; therefore overlooking their changing as-
pects and ignoring their evolution and dynamics. In-
ternational business research must acknowledge this
dynamic perspective, taking into account that changes
arise quicker on the surface level (i.e: behaviors and
attitudes) than in deeper levels (i.e. values) and that
those aspects of cultural values relating to economic
activities change more quickly than aspects relating to
personal relationships – see, among others, Ralston
(2008), Taras et al. (2012) and Tung and Verbeke
(2010).
On the assumption that culture is dynamic, interac-
tions among different IB actors and between IB actors
and their environment arise as key drivers of cultural
change. Interactions between different IB actors de-
rive in both globalization and acculturation processes
(Berry, 2008) that, in turn, give rise to cultural evo-
lution and change. Globalization involves a flow of
cultural elements, as well as the establishing of re-
lationships and networks that may derive in variable
and even opposed consequences (from cultural con-
vergence to cultural reinforcement). Acculturation –
a concept borrowed from the discipline of cultural an-
thropology and widely applied in psychology – relates
to ‘phenomena which result when groups of individ-
uals having different cultures come into contact, with
subsequent changes in the original culture patterns
of either or both groups’ (Berry, 1980, 2008). There-
fore, acculturation is mutual and affects both the firm
entering a host country/region and the latter’s society.
Both, each party’s cultural strength and the pattern
of cultural interaction between them, condition the
outcome of the acculturation process.
When analyzing interactions between firms and in-
stitutions, the Co-evolutionary Theory arises as a use-
ful theoretical framework to address the dynamics of
cultural evolution. In the IB field, the role of the in-
stitutional environment has been widely analyzed on
the basis of the Institutional Theory that distinguishes
between regulatory, normative and cognitive institu-
tions. Cultural issues are gathered within the norma-
tive pillar, as it reflects the values, beliefs, norms
and assumptions in a given country. This theory ap-
proaches institutions in terms of isomorphism, so that
firms engage in responsive and adaptive processes
to achieve and maintain legitimacy (DiMaggio and
Powell, 1983). The Co-evolutionary approach pro-
poses that firms co-evolve with their environment so
that managerial adaptation and environmental evolu-
tion occur simultaneously and influence each other
International Business and National Culture
(Lewin and Volberda, 1999). In the IB context, this
approach is based on the interplay between interna-
tional firms’ activities and the evolution of institutions
(Cantwell et al., 2010), proposing a bidirectional in-
fluence between firms’ managerial decisions and the
institutional environment. It is not only that firms’
internationalization activities act as a driving force
in the institutional evolutionary process; but also that
firms can act as institutional entrepreneurs promoting
changes in existing institutions in both the home and
host countries. A better understanding of co-evolution
in an IB context could shed new light on the role of
firms in the evolution of national institutions, among
them, normative institutions which, in turn, could play
a key role in international entrepreneurship decisions.
The Upper-Echelon Theory is another framework
scarcely used within the IB field that may help to ad-
dress some existing gaps in the IB literature. This per-
spective posits that strategic choices are conditioned
by managerial background characteristics (Hambrick
and Mason, 1984), so that managers make decisions
consistent with their cognitive orientations, percep-
tual processes, values and experiences. National cul-
ture may be, in turn, a major variable likely to af-
fect the development of cognitive and thinking styles
of managers. Although a few studies exist provid-
ing some evidence of the association between top
management characteristics and internationalization
decisions – see Dimitratos et al. (2011) for a re-
view – there is a lack of research analyzing how the
NC of decision-makers and its interplay with other
personal characteristics impact internationalization
growth decisions, entry mode strategies and orga-
nizational structures. As executives’ experiences and
values influence their interpretations of the situations
they face (Hambrick, 2007), research should be de-
veloped dealing with the way in which managers’ NC
conditions the way they face cultural differences, as
well as the decisions they make to address them. As
shown by Williams and Grégoire (2015), cognitive
considerations that reduce (commonalities) or aug-
ment (differences) distance have relevant effects on
decisions of where, when and how to internationalize.
The Real Option Theory (Bowman and Hurry
1993; Mitchell and Hamilton 1988) is a particularly
suitable framework for analyzing the role played by
some cultural dimensions (i.e. uncertainty avoidance)
in internationalization processes carried out through
direct investments – see Ahsan and Musteen (2011)
for an exhaustive review. By undertaking small invest-
ments in the host country, firms gain the right (in other
words, create a real option) to pursue some particular

C 2015 British Academy of Management and John Wiley & Sons Ltd.
15
actions in the future (among them, new larger or con-
trol investments). This approach is based on learning,
flexibility and follow-on opportunities as a means to
deal with uncertainty avoidance in investment pro-
cesses. Therefore, it arises as a relevant framework
for analyzing not only FDI decisions, but also entry
mode and establishment strategies.
The analysis of different factors that may mod-
erate or mediate the impact of NC/CD on interna-
tionalization decisions is also a stream still to be de-
veloped fully. While some factors may enhance the
influence of CD, others may act as closing distance
mechanisms (Shenkar, 2001). Linguistic differences
(Joshi and Lahiri, 2015; Zhu et al., 2015), economic
freedom distance (Arslan et al., 2015) and manage-
ment practices (Gunkel et al., 2015) are among the
most recently explored moderators/mediators. This
seems to be a particularly interesting issue in identi-
fied transversal/common sub-streams (i.e. choice of
host country or performance), as quite contradictory
evidence is shown. For example, empirical evidence
shows that the CD between the home and the target
seems to play a role in the internationalization deci-
sion only when both countries share a similar context
in terms of economic development. However, it has
not been explicitly tested whether it works in the same
way when considering different internationalization
entry strategies. In a similar way, the influence of cul-
tural issues on the internationalization process perfor-
mance differs strongly, depending on the entry mode
strategy considered. Although it is certain that the
differentiated features of each entry strategy underlie
these results, it is also true that the role of moderators
has been more widely analyzed within some particu-
lar categories (i.e. FDIs), but scarcely analyzed within
other ones.
In the particular sub-field of International Human
Resource Management, although literature dealing
with expatriates’ management is extensive, the
differentiated role played by cultural issues in the
particular case of self-initiated expatriates (SIEs)
remains under-researched. The term SIE refers
to individuals that take the initiative, independent
of an employer, to move to a foreign location for
employment, career and/or travel or lifestyle reasons;
in other words, individuals who work abroad on their
own initiative – see Doherty (2013) for an extensive
review of the existing literature. When compared
with corporate expatriates, cultural issues may play a
significantly different role in SIE’s motivation, man-
agement and performance. First, their own cultural
experience and the opportunity for personal (rather
16
than professional) learning can be among SIEs’ main
motives to go abroad (Thorn, 2009). In addition,
SIEs have autonomy to make decisions over where
they move to; therefore, they can choose the cultural
host environment that arises as the most attrac-
tive/challenging for them. As a consequence, their
social and personal adjustment to the local context
tends to be quickly and satisfactorily developed. Con-
versely, their technical or work adjustment, as well as
their degree of job satisfaction, can be negatively af-
fected by their propensity to move and their potential
to be less committed to an organization (Froese and
Peltokorpi, 2011; Mayrhofer et al., 2008). In a similar
way, the increasingly changing gender composition of
expatriates posits a challenge for researchers. Regard-
less of the growing number of female expatriates (see
Janssens et al., 2006), little research deals with the
distinctive features of their professional and personal
experiences (De Cieri et al., 2007) and with the role
played by cultural factors in these. As both gender and
NC are among the factors conditioning the decision
to move abroad – see the studies by Doherty (2013)
and Thorn (2009) – research is needed to analyze the
interrelationship between both of them. In addition,
as shown by Janssens et al. (2006), female expatriates
can rely on the gender–hierarchy–cultural interaction
to position themselves and guide their actions in their
professional context. Therefore, research analyzing
how this interaction conditions these expatriates’
management and performance is needed. An addi-
tional issue that has scarcely been explored is the
differentiated social and cross-cultural adjustment
process that expatriates follow in terrorism-
endangered countries (Bader and Schuster, 2015;
Bader et al., 2015). In this particular context, both or-
ganizational support and expatriates’ social networks
in the host country play a role that goes far beyond
traditional cultural training and social support.
It is also important to note that the existing liter-
ature shows a strong Western bias. Although the se-
lection of journals reviewed can clearly underlie this
bias, more research is needed dealing with the role
of NC issues on internationalization processes from
different perspectives. Developing research from an
Asian perspective is relevant, insofar as Asian cultural
patterns seem to differ strongly from Western patterns
in key dimensions such as the short-/long-term orien-
tation or restraint/indulgence, among others. In a sim-
ilar way, more research from an African perspective
is needed, as African societies also show distinctive
cultural features that are not necessarily well identi-
fied in the existing literature (Burgess, 2011; Munene

C 2015 British Academy of Management and John Wiley & Sons Ltd.
C. López-Duarte et al.
et al., 2000). In addition, as existing literature points
to a clear interaction between cultural issues and eco-
nomic development, new research is needed focus-
ing on emerging economies. Related to this partic-
ular issue, Africa is an under-researched continent
within existing literature (Ramamurti, 2009; Rug-
man, 2009). As pointed out by Javidan et al. (2006)
and Redding (2005), the relation between NC and
economic development can be co-evolutionary: a so-
ciety’s economic wealth has an impact on its culture,
but cultural factors also play an important role in shap-
ing the society’s economic progress – see Munene
et al. (2000) for an analysis relative to development
in Sub-Saharan African countries. Some dimensions
and measures of NC (as traditionally measured in IB)
are correlated with national wealth, as shown, for in-
stance, by Hofstede (2006). However, it is important
to consider that national wealth may be at the same
time an antecedent and a consequence of these dimen-
sions. Even more, the role to be played by (national,
international and foreign) firms within societies
clearly differs, depending on the society and its partic-
ular features, among them cultural features (Redding,
2005). Therefore challenges are posed to researchers
relative to the analysis of the role to be played by
internationalized and foreign firms within different
African societies, the potential validity of theoretical
IB approaches developed from a different perspec-
tive (i.e. North American, European) to these firms’
internationalization processes, the way to handle cul-
tural issues in internationalization processes from and
to African societies, as well as the role to be played
by these issues in shaping these societies’ economic
wealth.
When dealing with methodological issues, this re-
view allows two main reflections to be derived. First,
most empirical research in the field relies on quan-
titative methods or case studies; therefore, research
developed from a qualitative perspective that goes
beyond particular case studies is needed (i.e. qualita-
tive comparative studies, ethnographic analyses, lon-
gitudinal qualitative studies or phenomenographic ap-
proaches). Qualitative research can make substantial
contributions to the field, mainly by uncovering prac-
tical and theoretical paradoxes and clarifying contro-
versial results (Doz, 2011). Once again, the selection
of journals reviewed can clearly underlie this lack of
qualitative studies. As shown by Welch et al. (2013),
the view that quality research is suited to exploration,
discovery and induction as opposed to theory-testing
remains a dominant approach in top-tier manage-
ment journals. Even more, both the journals’ editorial
International Business and National Culture
policies and the editorial team composition have an
impact in promoting particular choices related to the
issues addressed, methodologies and even rhetorical
choices.
Second, studies applying new models/
measurements of national cultural dimensions
are also needed. Although highly cited and recog-
nized, Shenkar’s (2001) recommendations relative
to this issue seem to have been poorly followed
(see also Shenkar, 2012). Most empirical studies
keep using Hofstede’s values as the standard for
measuring CD. The use of this model implies several
fundamental limitations. Some of them relate to
issues already addressed in previous paragraphs
in this section (country-level approach, static per-
spective, ignorance of interactions, focus on values
overlooking behaviors, attitudes and practice), while
others derive from methodological flaws in the
model’s development – see McSweeney (2002) for
an extensive review on this point. In short, and
apart from methodological shortcomings, this model
fails in measuring rich, dynamic and multi-level
cultures (Sasaki and Yoshikawa, 2014). Another
cultural measure frequently used in the IB literature
is the more recent model developed within the
GLOBE project (House et al., 2004). Although it
has offset some of the limitations addressed above –
it focuses on societies rather than on countries and
distinguishes between cultural values and practices –
it keeps ignoring dynamic and multi-level aspects of
NCs.
In addition, a particularly low number of studies
use different measurements to test the reliability of
their results, the role of individual cultural dimensions
remains highly explored, cognitive CD measurements
are scarcely used and, when the above referred models
are used, new cultural dimensions are not considered.
Even more, when taking into account studies that use
different models, results seem to be contingent on
the measurement. It clearly seems that the model and
index’s easiness of measurement and operation has
overcome its limitations in existing research.
Empirical studies should address this issue by rest-
ing on decision-makers’ actual perceptions and expe-
riences relative to cultural issues and analyzing cul-
tural differences in a relational and dynamic context.
In addition, we call for empirical studies considering
cultural positions (Drogendijk and Holm, 2012) and
cultural friction (Shenkar et al., 2008), rather than
CD. The cultural position concept refers to the actual
cultural characteristics of both parties involved in a re-
lationship and to the differences between them; there-

C 2015 British Academy of Management and John Wiley & Sons Ltd.
17
fore, it takes into account both the cultural features of
each party and their relative content or position. It is
not only the divergence along a particular cultural di-
mension between two parties that is relevant, but each
party’s value on this dimension, and each party’s rela-
tive position when assessing the divergence. Cultural
friction centers on the actual encounter and interac-
tion of cultural systems within a context of power re-
lations and potential conflict between parties. It takes
into account how cultural relations evolve over time
(therefore, culture is created and re-created by actors
embedded in organizational and national identities),
as well as the potential interest asymmetry and goal
incongruity between parties.
The following issues arise as the main limitations
of this review: having focused our review process
on top management and IB journals, contributions
in other outlets have not been included in the re-
view (journals that are not included in the selected
list, books). Broadening the selected list of outlets
arises as an interesting point to extend this review.
It would allow not only taking into account new or
innovative approaches at an early stage of develop-
ment, but also correcting some of the biases identi-
fied in this paper (i.e. Western bias, lack of qualitative
studies), and to ensure a more complete coverage of
the field. The use of a qualitative subjective criterion
(based on researchers’ interpretation) for analyzing
and classifying the selected articles is a second lim-
itation. We have followed this methodology, as we
think it confers a level of thoroughness to the analysis
of selected articles higher than quantitative or biblio-
graphic methodologies. The development of an objec-
tive quantitative analysis based on bibliographic mea-
surements would be a second way to disseminate this
research.
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Supporting Information
Additional Supporting Information may be found in
the online version of this article at the publisher’s
website:
Appendix S1. List of reviewed articles (Word docu-
ment)