Internationalization of Multinational Companies and Cognitive Differences Across Cultures: A Neuroeconomic Perspective

Abstract

From a classical perspective, multinational companies (MNCs) operate based on market determinants, but recent economic discussions emphasize the central role of the human cognitive system in the decision-making process, thereby giving birth to interdisciplinary fields such as behavioral economics and neuroeconomics. While neuroeconomics is still considered an emerging field, hitherto scant studies have investigated the reflection of cultural experiences on the nervous system. Moreover, the interpretation of cultural diversity in the decision-making process, especially from a neuroeconomic perspective, has not been explored. In response, this study, aperspective research in nature, endeavors to research the neural responses to cultural diversity by contextualizing the neuroeconomic discussion within an MNC framework as one of the best multicultural settings. This study demonstrates that the internationalization process of MNCs is established on the cultural identity and integration of the executive. Through a neuroscientific lens, our findings prove that culture is a fundamental determinant of the cognitive makeup; therefore, cultural diversity in MNCs influences their decision-making process. Moreover, the performance of MNCs is driven by cultural harmonization at the executive level. Finally, the study reveals that the novel field of neuroeconomics is instrumental in identifying cultural intuitions on brain cells and the implications on economic decisions even at a corporate level. The main contribution of this study is the initiation of a multidisciplinary merge of the sociocultural and economic as well as neuroscientific fields, as a research center for MNCs’ decision-making processes.

Understanding Cross-Cultural Differences in Conceptualizing International Trade Patterns: A Neuroeconomic Perspective

“…Defined as the exchange of capital, goods and services across territories, international trade is a complex process due to the numerous differences between patterns such as currency, government policies, judicial systems, laws, and markets influence trade ( Hofstede, 1980 ; Cheng et al, 2022 ; Chin et al, 2022 ). But to easy trade between countries, international economic organizations were formed to establish concepts that promote uniform market conditions for members, mostly based on traditional economic determinants (GDP, tax, comparative advantage, and resource endowment) ( Yukl, 1994 ; Venkatesh and Van, 2005 ).…”

“…But to easy trade between countries, international economic organizations were formed to establish concepts that promote uniform market conditions for members, mostly based on traditional economic determinants (GDP, tax, comparative advantage, and resource endowment) ( Yukl, 1994 ; Venkatesh and Van, 2005 ). Unfortunately, social and cultural implications to shaping the patterns of international associations, as relevant as are to the success or not of international relations, have not been given the necessary attention especially in research discussions ( Cheng et al, 2022 ). Meanwhile, geographical distribution of culture is an unavoidable issue in international trade where cultural distance is considered as a fundamental element of analyzing trade decisions ( Hofstede, 1980 ; Acheson and Maule, 2006 ).…”

“…Especially, this article endeavors to propose the adoption of a neuroeconomic approach in the conceptualization of international trade patterns across nations. Obviously, with the neuroscientific discoveries, the correlation between cultural identities and corresponding neural reactions could facilitate the conceptualization of international trade patterns favorable to specific cultural identities ( Vartanian et al, 2015 ; Cheng et al, 2022 ).…”

Multicultural Neurolinguistics: A Neuroscientific Perceptive of Cross-Cultural Differences in Translation

“…Further technical advances such as Hemodynamic (e.g., PET and fMRI) use blood flow observations in the brain to determine the relation between parts of the brain and languages (Wong et al, 2004 ; Bender, 2020 ). Other neuroscientific techniques such as EEG, MEG and TMS use electric and magnetic field activities to detect brain activity at a millisecond degree of stimuli, very instrumental for language comprehension and production (Cheng et al, 2022 ).…”

“…From the perspective of the multicultural neurolinguistic field, the neural reaction map of cross-cultural and language diversities will be a monumental paradigm shift for the translation discipline. Echoing this, multicultural neurolinguistics will be strategic to provide a scientific translation chart of languages across cultural identifications (de Boer and Thompson, 2018 ; Cheng et al, 2022 ). Evidently, multicultural neurolinguistic studies will disclose, to a deeper extent, the within-group and the within-individual cognitive diversities.…”