Psychic distance and performance of MNCs during marketing crises

Nonlinear Effects of Dynamic Export Pricing on Export Sales: A Longitudinal Investigation

“…Regarding the external environment, psychic distance and cultural distance are two constructs that have also been found to play a major role in the firms' export operations (e.g., Sousa and Bradley 2006). However, little is known in the literature in terms of whether and how marketing capabilities overcome the challenges posed by psychic distance towards foreign markets (Dinner et al 2018). This presents an opportunity for future researchers to investigate other environmental factors, which should further facilitate the DC perspective by refining its boundary conditions.…”

Shareholder wealth effects of cultural diversity among blockholders: Evidence from cross‐border acquisitions by U.S.‐listed companies

“…Yet some suggest that performance outcome changes are nonlinear, depending on the degree of cultural diversity (or diversity in general; Dinner, Kushwaha, & Steenkamp, 2018;Shin, Hasse, & Schotter, 2017;van Der Vegt & Bunderson, 2005). For instance, Dinner et al (2018, p. 5) reason that shareholder wealth has an inverted U-shaped relationship with cultural distance during a marketing crisis due to two opposing forces: (a) increased anticipation of (and thus preparation for) cultural differences, where such an increase has a decreasing margin, and (b) ever-increasing challenges (and thus costs) of adaptation.…”

“…Yet some suggest that performance outcome changes are nonlinear, depending on the degree of cultural diversity (or diversity in general; Dinner, Kushwaha, & Steenkamp, ; Shin, Hasse, & Schotter, ; van Der Vegt & Bunderson, ). For instance, Dinner et al (, p. 5) reason that shareholder wealth has an inverted U‐shaped relationship with cultural distance during a marketing crisis due to two opposing forces: (a) increased anticipation of (and thus preparation for) cultural differences, where such an increase has a decreasing margin, and (b) ever‐increasing challenges (and thus costs) of adaptation. In another example, as cultural distance increases between the home and the host countries, the tendency for expatriations first decreases due to higher ex ante costs for searching and selecting candidates and then increases because of higher ex post difficulties of coordination and control between the two cultures by foreign nationals in the host countries (Shin et al, ).…”

“…As a result, investors would negatively perceive a CBA decision under this situation, resulting in negative shareholder wealth effects. The overall effects are likely nonlinear, because as cultural diversity increases linearly, any additional benefits from RDT would decrease as agreements can only be achieved at relatively low levels of dissimilarity (e.g., Dinner et al, ). The additional costs of coordination, however, would continue to increase (e.g., Dinner et al, ), suggesting that the net effects have an inverted U‐shape (as presented in Figure ), similar to recent findings in the literature (e.g., Dinner et al, ).…”

“…In addition, although Hofstede's cultural dimensions remain the most widely used, some scholars have questioned their ability to capture dynamics of cultural evolution over time (e.g., Beugelsdijk & Welzel, ; Dinner et al, ). They suggest an alternative cultural measure and data source based on Inglehart and Welzel's () two‐dimensional cultural framework (Beugelsdijk & Welzel, ; Dinner et al, ). Based on the World Values Survey, Inglehart and Welzel () suggest that cultures evolve over time; two dimensions, “traditional versus secular‐rational values” and “survival versus self‐expression values,” explain about 70% of cultural variations across societies.…”