NATIONAL CULTURE AND INTERNATIONAL BUSINESS: A PATH FORWARD

ABSTRACT
The anniversary of Kogut and Singh’s construct of “cultural distance” is a good time to reflect on this
immensely popular but flawed construct, assess the efficacy of the remedies offered for its reform and
refinement, and chart an alternative approach that represents a departure from a distance as the dominant
paradigm with which to view and analyze the impact of national culture on cross-border business. The
proposed alternative, a contact-based framework shifts attention from what sets cultures apart towards the
actual cultural interface that firms and their executives experience when participating in an international
transaction. With this lens, the cultural exchange is regarded as an evolving interactional process of
engagement, which commences prior to a transaction and proceeds through the life of the inter-party
arrangement and beyond, and whose potential to yield negative -or positive- outcome is subject to
specific contingencies. Implications for theory, methodology, and practice are delineated.

Keywords: cultural distance; cultural friction; paradigm shift; contact-based framework; national culture

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 INTRODUCTION
Cuypers, Ertug, Heugens, Kogut, and Zou (2018) and Maseland, Dow, and Steel (2018) commemorated
thirty years to the publication of Kogut and Singh’s (1988) paper that coined the term “cultural distance”
(CD) and generated a stream of research that was to form the dominant perspective on national culture in
international business (IB). Together with an Editorial by Beugelsdijk, Ambos, and Nell (2018), the
papers assessed the contribution of the Kogut and Singh’s (1988) article and offered ideas for
improvement and refinement of a construct whose popularity has not dimmed in the face of ongoing
criticism. Not only does the construct remain “much loved” (Zaheer, Schomaker, & Nachum, 2012: 18),
but it has engendered the view that “almost…no international business (IB) can be complete unless there
is an explicit variable controlling for cultural distance” (Cho & Padmanabhan, 2005: 309) and, even more
broadly, that “international management is management of distance” (Zaheer et al., 2012).
At the same time, fundamental flaws have been uncovered in the CD approach (Shenkar, 2001), and
results should have been sobering. Maseland et al. (2018) report that of seven meta-analyses reviewed, six
“have found small and largely non-significant effect sizes for the relationships between cultural distance
and various dependent variables”. Beugelsdijk, Kostova, Kunst, Spadafora, and van Essen (2018) find CD
a significant predictor of a single aspect of FDI, greenfield investment, but not ownership stake or other
variables; even that modest finding is attributed by Maseland et al. to “greater statistical power” (2018:
1155). That the construct survived evidence of basic flaws and, at best, inconsistent support, is a
testimony to its staying power; but, as Tung and Verbeke (2010) ask, does it set us on the road to
progress? We suggest it does not, and that can even stymie advance. We thus take Devinney and
Hohberger’s (2017: 54) advice that “it is perhaps time to look at different avenues of work and ones that
do not follow the same path as in the past.”
With this Point article, we seek to go beyond a critical assessment of Kogut and Singh’s (1988)
article and the research it has spawned, criticism which has been raised (Shenkar, 2001), expanded (Tung
& Verbeke, 2010), confirmed (e.g., Huang, Zhu & Brass, 2017; Lee, Shenkar, & Li, 2008, Selmer, Chiu,
& Shenkar, 2007; Yildiz & Fey, 2016) and extended to fields beyond IB (e.g., Lim, Makhija, & Shenkar,
2016). Our first goal is to evaluate the remedies offered for the illusions and distortions that afflict the CD
construct, and judge whether those remedies have the potential to overcome the flagged problems. Our
second goal is to offer an alternative paradigm that is conceptually sound, theoretically anchored, and
metaphorically adequate, that is, realistic and pragmatic in its depiction of national culture and its cross-
border business process and impact. We believe that this approach offers a viable alternative, or at least a
complement that can serve as a foundation for future research and theory development.

THE CULTURAL DISTANCE APPROACH TO NATIONAL CULTURE

The Kogut and Singh’s (1988) article caused quite a stir in the IB literature. Up to that point, national
culture was the exclusive domain of a small group of cross-cultural psychologists, with few if any links to
their macro brethren. Venturing into a deceivingly barren land, IB researchers created the concept of
“psychic distance” (PD) (Beckerman, 1956), later placed at the heart of the Uppsala model (Johanson &
Vahlne, 1977), which shed its non-culture variables when morphed into CD in the Kogut and Singh’s
(1988) version. The latter iteration not only coined the CD term, but also developed an algorithm to
measure it and provided a link to a specific set of data, to establish what they saw as “tight unity between
the concept of culture as a distance, the calculation of distance, and the data” (Cuypers et al., 2018: 1138).
Just how popular is the CD approach? Stahl and Tung (2015) found that 50 of the 136 empirical
papers from the Journal of International Business Studies (JIBS) they reviewed have used the Kogut and
Singh Index (KSI). The 1988 article is the second most cited JIBS article, lagging only Johanson and
Vahlne (1977) who popularized the predecessor PD concept. It is also the second most cited in IB culture
research overall, just behind Hofstede’s (1980) landmark book, and forms the nucleus of one of two
primary citation clusters in the IB literature on national culture (Pinto, Serra, & Ferreira, 2014). Various
counts put the paper’s citations at more than 6000 (Beugelsdijk et al., 2018b, Harzing & Pudelko, 2016),
with numbers rising briskly year on year, apparently undeterred by the publication of damaging criticism

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(Konara & Mohr, 2019). In fact, citations have actually increased since the publication of Shenkar’s
(2001) critique (Zaheer et al., 2012).
Citations, we know, are not necessarily an indication of fitness and rigor (MacRoberts &
MacRoberts, 1989; 1996). Maseland et al. (2018) voice the risk of “justification by citation”, that is,
conferring legitimacy solely by virtue of prior usage. At times, citations merely acknowledge a concern
while sidestepping its repercussions. In a review of the CD literature, Harzing and Pudelko (2016: 4)
report that “the vast majority of empirical papers that were either citing Shenkar, Luo, and Yeheskel’s
(2008) cultural friction metaphor or Tung and Verbeke’s (2010) suggestions only did so in order to
highlight the conceptual problems of the Kogut and Singh (1988) formula, and subsequently went on to
apply the formula all the same, with reference to its established use in the past” (italicized in the original).
Maseland et al. (2018: 1155) note that authors “have used exactly the same arguments and techniques as
the original KS article, thus entrenching its weaknesses and limitations” and that “as a result, these
weaknesses and limitations have actually become established practices, which is notoriously difficult to
correct.” In a recent example, Chua, Roth and Lemoine (2015: 204) justify using the KSI in that “this
method of computing cultural distance has gained acceptance and is widely used in international business
research”.
Difficult it may be, but when concerns about rigor and relevance are raised and sustained, using
constructs just because “their usefulness is so great” (Zaheer et al., 2012: 19) may be counterproductive.
The scientific process guides us to correct remediable flaws, and, when key problems appear to be serious
and possibly incorrigible, when there “is no guarantee that we are making progress” (Dow, 2014: 119),
consider alternatives. To reiterate, in this article, we do not seek to repeat the criticism of the CD
approach on conceptual, theoretical, methodological and empirical grounds (Shenkar, 2001; 2012; Tung
& Verbeke, 2010), except in conjunction with the remedies offered for flagged deficiencies and in the
context of assessing the efficacy of such responses and the associated need for an alternate.

REMEDIES AND REFINEMENTS

For a systematic review of the published remedies, we followed Cuypers et al.’s (2018) method and
selected 16 journals with more than 20 citations in the Web of Science, covering from 1988 to September
2019 period. We collected a total of 1,047 papers, accounting for 39 percent of the total citations (2,663
in March, 2020) in the Web of Science Database. We first checked whether a paper has used a CD-related
variable in its empirical analysis, which excluded 434 papers or roughly 41 percent of the total, including
editorial reviews, meta-analyses, points, commentaries, perspectives, formal modelling and studies citing
the paper but not for culture-related purposes (e.g. multi-nationality or international market experience).
From the remaining 613 papers with at least one CD-related variable, 291 used CD as the independent
variable (47 percent of 613), 272 used it as a control variable (including in the robustness check, 44
percent of 613), and 58 papers employed CD as a moderator (9 percent of 613).1
We adapted Tung and Verbeke’s (2010) list of CD-related illusions which builds on and expands on
Shenkar (2001) against which we counted and classified remedies, if any. Additional flaws not on the
original lists for which remedies have been offered over the years have also been listed and counted
accordingly.
We first checked whether authors provided justification for the use of CD in the empirical section,
and then reviewed the robustness check and the discussion section for additional information. Statements
justifying the use of CD in prior usage, e.g., because it is “widely used” or “most commonly used”, are
classified as providing no remedy. The same is true for justifications building on prior CD-based results.
For example, Chua et al. (2015:204) explain that “to further verify that this (KSI) approach is valid, we
examined sample scores for key countries derived from our dataset and found them to have face validity.
For instance, the cultural distances between the United States and China (4.61), Singapore (4.03), India
(1.87), and the United Kingdom (0.43) are in the order that one would expect. Hence, we are confident
that the measure we used adequately captures cultural differences between countries.” Similar statements
are counted as “illusion noticed” but “no remedy provided”.

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 Since 44 percent of our sample used CD as a control variable, we only count a remedy if the authors
explicitly expressed that culture-related variables such as language, religion, geography, experience, etc.,
have been added to improve the validity of the CD construct (e.g., Flores & Aguilera, 2007; Slangen &
Hennart, 2008). Similarly, we only count the remedy for the illusion of corporate/ regional homogeneity
when a paper includes cultural-related variables at the firm or subnational level (e.g., Vaara, Sarala, Stahl,
& Björkman, 2012). The same principle applies to the symmetry assumption: we only count a uni-
directional CD impact as a remedy when the authors state that a sample was deliberately designed to
solve the symmetry illusion (e.g., Lee et al., 2008).
Following the above procedure, we find that 331 of the 613 papers provide no justification for using
KSI, 93 papers acknowledge at least one flaw but take no empirical step to correct it, and only 189 papers
provide at least one remedy. Academy of Management Journal (AMJ) has the highest percentage (62
percent of 189, tied with International Management Review) of articles noticing illusions and the highest
percentage (43 percent of 189) of papers providing remedies, but this is based on small sample size.
Among 16 journals, only JIBS scores better than average on all three indicators in Table 1: out of 164
papers, 76 spot flaws and 61 offer at least one remedy.
------------------------------------
Insert table 1 about here
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We then analyze 189 papers which employed at least one of remedy and list the most popular
approaches (more than 10 percent) in Table 2. We find that the most popular remedy addresses a
weakness that is not on the Tung and Verbeke’s (2010) list and has to do with general criticism of the
Hofstede framework on which the KSI is based. This is not the place to discuss that criticism, suffice is to
reiterate Shenkar’s (2001) recommendation to use multiple indices, e.g., GLOBE and Schwartz, to
enhance reliability given the tacit and complex nature of the culture variable. A total of 70 papers used
multiple measures (those using a single measure, even if not Hofstede’s (e.g., Liu & Maula (2016) only
used GLOBE), are not counted).
The second most popular presumed remedy, employed by 48 papers, is also not a direct response to
the Tung and Verbeke’s (2010) list, but rather a potential refinement of the KSI formula, substituting
Euclidean or Mahalanobis distance, with the goal of relaxing the assumption of zero covariance across
dimensions (Kandogan, 2012). We do not view this as an actual remedy, not only because results appear
to vary little, but also because it does not address any of the illusions flagged earlier.
The next remedy, using a single dimension (rather than an index), was initially proposed as a
response to the illusion of equivalence (Shenkar, 2001; Tung & Verbeke, 2010), and was later posed as a
way to assure the theoretical underpinnings for CD related arguments (Beugelsdijk et al., 2018a). A total
of 44 papers have taken this approach (including checking individual dimensions for the robustness).
Still, it should be noted that the use of a single dimension sidesteps rather than resolves the equivalence
illusion and typically does so at the cost of missing on inter-dimensional linkages in a national cultural
profile.
The fourth most popular remedy, with 36 papers, is devised to deal with the illusion of CD stability.
Among the 36 articles, 27 explicitly included distance-closing mechanism variables, such as experience
(e.g., Slangen & Hennart, 2008). While many potential mechanisms, such as an evolution of corporate
culture from that of an entrepreneurial startup to that of an established company are yet to be included,
this is a step in the right direction. The same is true for the 9 papers using a weighted formula (e.g.,
Hutzschenreuter & Voll, 2008 for “added CD”), though this approach, while dealing with stability,
violates the equivalence illusion by aggregating the different cultural dimensions.
A more complex challenge has to do with the confounding of units and levels of analysis (Kirkman
Lowe, & Gibson, 2017; Tung & Stahl, 2018). A total of 33 papers designed their own questionnaire
survey to capture firm-level cultural variables (e.g., Sarala & Vaara, 2010). This is an improvement in
that it captures the cognitive element missing from the generic data set associated with the CD
framework, but it sidesteps rather than resolves the problem of using the same ‘algorithm’ at different
levels and in different contexts, e.g., inter-firm (say, a cross-border joint venture where parent firms

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engage with each other) and firm-country (say, the firm decision to enter a national market, where the
interface is between a company and national host institutions and constituencies), which confounds
learning to work with another firm with obtaining legitimacy in a host environment.
The last two remedies are set to address the linearity and the symmetry assumptions, amounting to
28 and 19, respectively. To remedy the presumption of linearity, papers either use cultural clusters
(Ronen & Shenkar, 1985; 2013) or hypothesize non-linear relationships (e.g. U-shape or S-shape). Both
solutions are quite reasonable, if not full-fledged, as threshold effects are often not hypothesized nor
tested. Among the 19 papers responding to the symmetry assumption, 14 explicitly claim designing their
study with a specific direction in mind, while 5 introduced a directional dummy. For instance, Lee et al.
(2008) found significant differences in the impact of cultural differences between inward (seeking foreign
partners for FDI in the home country of South Korea) and outward investment (seeking foreign partners
for FDI outside South Korea). While primarily designed to gauge asymmetry, the design enabled a
disentanglement of the aforementioned confounding effect, consistent with the recommendation in
Kirkman et al. (2017).
------------------------------------
Insert Table 2 about here
------------------------------------
Having reviewed all the remedies above, we arrive at the most serious and unfortunately incorrigible
problem, the index itself. None of the reviewed papers offers a remedy to the problem of equivalence (as
noted, using a single dimension merely sidesteps the problem). There is simply no justification for adding
up and aggregating the various cultural dimensions into a single index, and plenty of evidence to show
that it is plain wrong due to the widely varied impact of the different dimensions (Berry, Guillén, & Zhou,
2010; Dow & Ferencikova, 2010; Dow & Karunaratna, 2006; Dow & Larimo, 2009; 2011). This should
not have come as a surprise: Hofstede made it clear that aggregation violated a basic assumption of his
framework.
The problem with the aggregated index goes well beyond the issue of unequal weighing, which,
while being serious enough, could perhaps produce distortion in magnitude alone. Rather, findings show
that gaps on some dimensions of culture produce a negative effect, whereas divergences on other
dimensions yield a positive outcome (Koch, Koch, Menon, & Shenkar, 2016; Shenkar & Zeira, 1992). In
addition, while a theoretical argument can be made for the impact of individual dimensions (Beugelsdijk
et al., 2018a), no such justification is on offer for the KSI, the centerpiece of the CD approach and by far
the most measure of the CD paradigm. The one possible exception, and indeed the theoretical platform on
which the CD paradigm presumably rests, is transaction cost economics (TCE), but in and of itself this
does not resolve the fundamental challenge of inverse impacts. Worse, as we will show, not only is the
TCE argument concerning CD questionable, it amplifies the problem by implicitly negating the
possibility of obtaining contrasting effects, to begin with.

THEORY PLATFORMS
Maseland et al. (2018) noted that most of the scholarly work in the CD tradition ‘invokes’ rather
than applies theory in a meaningful fashion. Hofstede (1980), the inspiration and data source for the CD
approach, used an instrument based on earlier work, in particular, Haire, Ghiselli, and Porter (1963),
which was anchored in motivation theory. That legacy was ‘lost in translation’ when travelling to the
macro IB realm, arriving stripped of its theoretical foundations, one of the competency traps associated
with using distance as an underlying metaphor (Shenkar et al., 2008). In the rare case in which
motivational theory has at all surfaced in the IB and strategy version of cultural diversity (e.g., Taras,
Kirkman, & Steel, 2010), it has not been adjusted for subsequent findings, in this case, the rejection of
Maslow’s (1943) hierarchy hypothesis (Alderfer, 1969). This, and the failure to identify other theories to
engage with culture, has left TCE as ‘the only game in town.’
An economic theory with behavioral elements, TCE is by far the most popular theoretical platform
for CD studies. Culture plays, however, a minor and ambiguous role in TCE. As Williamson (1993:476)
writes, “The main import of culture, for purposes of organization, is that it serves as a check on

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opportunism; this is because it weakens social sanctions (e.g., against breach), undermines contract
enforcement (e.g., via bribery), and engenders “slight remorse” when behaving opportunistically.” As a
result, IB and strategy scholars applying TCE in conjunction with CD use a core construct of the theory,
uncertainty, as a proxy for cultural differences. This is a stretch, to say the least. Uncertainty is a
multifaceted construct (Ellis, Almor, & Shenkar, 2002), so even if it is implied by cultural differences, it
is vague what type of uncertainty they engender and what would be the impact.
The fundamental TCE logic for the most common IB application of cultural differences, entry mode,
is similarly suspect. Anderson and Gatignon (1986) and Gatignon and Anderson (1988) point out that
TCE’s entry mode prediction could go either way: a preference for whole ownership to control
opportunistic, culturally distant actors, or rather partial ownership, to mitigate locational risk. In addition,
gaps in different dimensions of culture may produce less uncertainty, or even reduce it (see the illusion of
equivalence). In addition, different parties to a transaction face different types and levels of uncertainty
(see the illusion of symmetry). Many of the other critiques of TCE, e.g., the avoidance of history and the
universal presumption of opportunism (e.g. Argyres & Liebeskind, 1999; Ghoshal, 2005; Ghoshal &
Moran, 1996; Pfeffer, 2005) also apply here and may have their roots in TCE’s own cultural relativity
(Hofstede, 1993; 1996), which makes it partial to individualism (Steensma, Marino, Weaver, & Dickson,
2000).
In any event, culture is about much more than about uncertainty. It concerns values, beliefs and
attitudes; it is a guide to behavioral norms, a marker of trust, and a compass for what transactions are
considered legitimate and how they should be conducted. As such, culture can yield a variety of
outcomes, both positive and negative. It is here that the distance paradigm becomes confined to a point of
obstruction. As Shenkar et al. (2008) write, the dictionary definition of distance lists “discord”,
“disagreement”, “dissension” and “dispute” as synonyms, alluding to the negative view embedded in the
metaphor. The TCE view is that cultural differences are always detrimental to firm operation and
performance since they are by and large an information cost (Caves, 1996). In Stahl and Tung’s (2015)
analysis, 41 of the 50 (82 percent) empirical JIBS studies that used the KSI made negative assumptions
concerning the impact of cultural differences; 7 were neutral or mixed, and only 2 looked at such
differences as potentially positive. Yet, as Zaheer et al. (2012) noted, similarity does not necessarily breed
harmony, and differences do not necessarily cause harm.
Indeed, research shows that while negative outcomes are possible with cultural differences (e.g.,
Palich & Gomez-Mejia, 1999), so are positive ones. The evidence for the latter comes from IB (e.g., Reus
& Lamont, 2009; Shenkar & Zeira, 1987; Stahl, Mäkelä, Zander, & Maznevski, 2010), but also from
other fields and disciplines. In economic geography, Ottaviano and Peri (2005) found that cultural
diversity increased productivity. In economics, Hong and Page (2001) discovered that diverse groups
were more productive, because their problem-solving ability benefitted from different heuristics. In
financial economics, Ahern, Daminelli and Fracassi (2015) explained that cultural diversity contributed to
M&A success because it raised alternatives to the status quo. Other examples abound.

SHIFTING PARADIGMS
Responding to the call to improve the quality of cross-cultural research, Tung and Verbeke (2010: 1261)
raise the question of “how do we progress beyond the point of adding only marginal value to extant
knowledge?” The answer, we believe, lies in the willingness to consider alternative paradigms to
challenge, complement, or substitute a current paradigm. Following Kuhn (1962), we use the term
“paradigm” because it is not merely a formulaic construct, but as a roadmap to how one approaches the
world. According to Kuhn (1962; 1970; 1977), paradigms are “models for thinking” which determine the
fundamental way in which the world is viewed and understood. This includes “law, theory, application,
and instrumentation together”, a “body of intertwined theoretical and methodological belief” (Kuhn,
1962: 10, 16-17; see also Shapere, 1964). The view is quite consistent with statements from CD
proponents that it is not only an algorithm but rather an interconnected set of elements, with a “tight unity
between the concept of culture as a distance, the calculation of distance, and the data” (Cuypers et. al.,
2018: 1138).

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 A paradigm typically starts with an abstract proposition that is “an object for further articulation and
specification under new or more stringent conditions” (Kuhn, 1962: 23-24), but in the case of CD, the
order has been reversed, starting out as a formula and ending with the aforementioned expansionary view
that “international management is management of distance” (Zaheer et al., 2012:19). This reverse order
may partially explain why the lack of “predictive accuracy (empirical adequacy)” (McMullin, 1993: 67)
did not undermine the CD approach, since “a problem or other anomalies” typically develop “in the
course of paradigm articulation” (Kuhn, 1962: 6). This leaves little room for an alternative because while
defenders “inevitably fail to make contact” with a rival paradigm, “troublesome anomalies” (McMullin,
1993: 55) are less likely to be noted under an inverse progression from articulation to concept.
A paradigm can be beneficial. It helps ‘connect the dots’ and enables further development by forcing
articulation of hitherto unknown linkages across diverse elements and between theory and application.
This help makes it testable and may sow the seeds of its eventual replacement should it prove not to hold
(Kuhn, 1962; 1977). A paradigm is also limiting, however. As Clarke and Clegg (2000: 47) note,
“Paradigms are what allow us to see certain things as something in particular, but they also make it
difficult to see certain other things that do not ‘belong’ within the paradigm”; “Being locked into a
paradigm at its worst can become a form of conceptual imprisonment”. In contrast, having multiple
paradigms “may help us see better where to go, what questions to ask, what evidence to seek, what to
deny” (Clarke & Clegg, 2000: 47). In the sciences, competing paradigms can exist side-by-side for a time
but eventually one replaces the other (Kuhn, 1977). This may not hold in the social sciences, to which
business management belongs. Clarke and Clegg (2000: 46) observe that unlike the sciences, where
paradigms exist in parallel for a transition period until a shift is consummated, “in management, at any
time, there are a number of competing paradigms.” The parallel existence is an opportunity to formulate,
compare and test the different approaches, enriching the field, until the eventual shift, that Kuhn views as
essential to scientific progress but is a time of uncertainty embedded in political processes (Kuhn, 1977;
1979; Loving & Cobern, 2000), may come.

The Roots of the Distance Paradigm

Before we discuss the alternative paradigm we offer, it is important to briefly recall why ‘distance’ has
become so entrenched in the IB literature (apart from the aforementioned inverse evolution) and why its
geographic manifestation was the “metaphor of origin” (Lakoff & Johnson, 1981) for cultural differences
in the first place (Shenkar et al., 2008). First, by the time the CD construct emerged, geography was an
established field and a bona fide IB variable (Buckley & Casson, 1976; Davidson & McFetridge, 1985;
Vachani, 1991). Second, as a spatial property, geographic distance belongs in the sensorimotor domain
and provides pictorial imagery of the physical world, historically, the dominant source for metaphors
(Cornelissen, 2005; Lakoff & Johnson, 1981; 1999; Narayanan, 1997; Tsoukas, 1991). Third, geographic
distance was considered "hard data," which fits well with the "imagery of order" and perceived rationality
pervasive in organizational research (Meadows, 1967; Morgan, 1997; Smircich, 1983). This provided a
counterbalance to culture, a concept that embeds subjective meanings and abstract elements (Jelinek,
Smircich, & Hirsch, 1983), and, in particular, human meanings (Morgan, 1997). Fourth, the US is a “low
contact” culture (Triandis, 1982; Watson, 1970), which is consistent with a disengaged view of cultural
differences. With the vast majority of management researchers, including those conducting cross-cultural
research hailing from the US or other Anglo Saxon countries (Pugh & Hickson, 1997; Tsui, Nifadkar &
Ou, 2007), and with almost all management and economic theories developed in those nations, it is not a
surprise that distance emerged as the lens of choice.2
Even with this geographic anchoring, scholars neglected deviations and anomalies which were
pointed out by geographers and trade scholars who included such variables as language and colonial
heritage that are closer to PD than to the CD view (Karolyi, 2016). Similarly, trade costs have been shown
to be asymmetric over time (Chen, Novy, & Pascali, n.d.), while export costs have been found to be
asymmetric between developed and developing markets (Waugh, 2010). Shipping costs also are
asymmetric to merchandise trade imbalances and historical (e.g., postal) treaties, and the effects of
geographic distance are nonlinear, as encapsulated in the geographic concept of “distance decay”

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(Haynes, 1974). Thus, the concept of fixed distance as deployed in KSI is not actually equivalent to
geographic distance, but rather is an artificial geometric construct. As such, it assigns properties that bear
little resemblance to the complex phenomenon it is supposed to capture.

From Separation to Engagement

Our point of departure for a paradigm reset is that IB is not only or even mainly about distance. This is
not to say that distance does not play a role, but rather that it merely represents a narrow and limited
aspect of the cross-border engagement. Above all, trade involves contact and interaction among traders,
consumers, intermediaries, rulers, and other constituencies. This is further amplified when one shifts from
arm’s length transactions to Foreign Direct Investment (FDI), which, by definition, involves contact
between the parties and their constituent parts, and sets the stage for exchange between firm executives
and other actors. As affiliates are negotiated, formed, and operated, human actors are posted and
interfaced, and contacts initiated, pursued, and mediated. This exchange is not merely a transfer of
resources, but an interface that is taking place within a historical and geopolitical context, representing
not only each of the parties but also their bilateral (or multilateral) dyads (or triads, etc.) as well as the ties
between the broader entities in which they are embedded, i.e. nations (Arikan & Shenkar, 2013; Li,
Arikan, Shenkar, & Arikan, 2020).
Even prior to a transaction, with contact limited to a few negotiators, individual actors embedded in
their respective firms and institutions prepare for a future exchange. They enact their environments using
stereotypes of others (Weick, 1995), inclusive of their cultural elements, leading to an anticipatory
adjustment of the cultural encounter (Black, Mendenhall, & Oddou, 1991), a cognitive and process-based
course of action (Scott, 1995). Dorrough and Glöckner (2016: 10836) simulated cooperation based on
national stereotypes and found that “social preferences are influenced by differences in wealth and in-
group favoritism, as well as effects of specific country combinations but not by spatial distance between
nations” (our italics). Doney, Cannon, and Mullen (1998) studied how national culture impacts trust,
while Guiso, Sapienza, and Zingales (2009) ranked mutual trust perceptions across five European nations.
From a psychological perspective, such stereotypes may change the following contact and then
generalized to other group members (Amichai-Hamburger & McKenna, 2006).

Alternating Theory Lenses

That TCE was able to enter unto the center stage of culture research despite its many vulnerabilities and
its little interest in the phenomenon says volume about the broader theory vacuum. Tellingly, among the
theories listed by Maseland et al. (2018), not one has culture as an original core construct. The potential
to draw on other theoretical streams from the macro organizational realm, or economics, a traditional IB
source for theory, is limited. In institutional economics, North (1990) acknowledges the importance of
“informal institutions”, which some economists now formally label “culture” (Alesina & Giuliano, 2015),
but formal institutions are, clearly, more important. In institutional theory, Scott’s (1995) normative pillar
appears close to representing culture, but its distinction from other pillars, in particular the cognitive, is
not definitive. The Uppsala model may be the only extant framework where culture is a core element, but
it only hints at a theoretical base with a definition that touches on social information processing, but
without a direct link to the theory by that name (Salancik & Pfeffer, 1978). With that, it is not a surprise,
as Beugelsdijk et al., (2018a: 1127) observe, that “no grand theory of distance” has emerged. Nor is
evident that one is possible or even needed, should distance not be, as we argue, the right lens with which
to look at culture, including cultural differences, and their impact.
If IB and economic theories offer limited prospects for theory development, there is room to engage
other theoretical lenses. For example, social identity theory (Tajfel, 2010) specified when and how
cultural affiliations become more salient and impact organizations. Salk and Shenkar (2001) applied the
theory in a European joint venture, showing how identification with national groupings overwhelmed
corporate identification, though this has also changed over time, partly based on the prevailing business
environment, with crises raising national at the expense of corporate identities. That study also showed
the importance of taking a process approach, as suggested by Johanson and Wiedersheim-Paul (1975),

8
who saw FDI as an “establishment chain”, an approach endorsed by Tung and Verbeke (2010: 1261) who
called on scholars to explore “processes of cultural integration”. Further, this reiterates the importance of
placing the culture in a business context, as advised by Morosini (1998), and the commensurate need to
identify relevant contingencies, as we explore below.

TOWARDS A CONTACT-BASED FRAMEWORK

In Search of Contingencies
Acknowledging varied outcomes for culture and cultural differences is a crucial start (Rugman &
Verbeke, 2001; Stahl & Tung, 2015; Sarala & Vaara, 2010; Tung & Verbeke, 2010; Verbeke & Yuan,
2016), but, indeed, merely a start. Just as affirming that culture matters (Kirkman, Lowe, & Gibson, 2006)
is only a first step (Devinney & Hohberger, 2017), confirming the potential for contrasting effects of
cultural diversity is the beginning of a long journey. The focus should now turn towards specifics, that is,
the conditions under which the impact will be positive or negative, the mechanisms involved, and the
process through which the benefits and drawbacks are activated.
Parkhe (1991) speculated that cultural differences are a draw when joint venture partners consider an
alliance because they imply different skills and capabilities, but become a liability during the operational
phase when partners work together. Reus and Lamont (2009) found that CD impeded M&A performance
by undermining the understanding of key capabilities that needed to be transferred and disrupting
communication between the parties, but enhanced performance for those who overcame those challenges.
Doherty and Chelladurai (1999) suggested realizing the benefits of cultural diversity, creativity,
challenge, and constructive conflict, necessitate a particular organizational culture and benefit from
heightened task interdependence and complexity. Shachaf (2008) found that cultural differences have a
positive influence on decision-making but a negative influence on communications. Frijns, Dodd, and
Cimerova (2016) reported that the negative effects of board diversity are concentrated among independent
directors, and differences in individualism and masculinity are mainly responsible for the impact. Finally,
Li, Brodbeck, Shenkar, Ponzi, and Fisch (2017) showed that the impact of cultural differences flips from
negative to positive when a foreign culture is considered attractive, and that cultural attractiveness is “a
predictor of FDI inflows and CBA (cross-border acquisitions) outcomes, whose explanatory power is
superior to cultural difference measures” (Li et al., 2017: 950). In other words, positive feelings
concerning a counterpart have the potential to not only reduce the negative impact of cultural differences,
but to transform them into a positive force.

Inputs from Contact Theory

While the aforementioned literature identifies contingencies mediating the impact of culture, we are still
lacking a comprehensive theoretical framework. Given the limitations of the current theory pool, the input
may need to come from far afield. We have already noted potential contributions from social identity
theory, but the current theory vacuum calls for casting a wider net. Given our proposed paradigmatic shift
towards the actual engagement linking participating entities, we have searched for a theoretical
framework that appears to be consistent with this approach as well as applicable to a business context.
Contact has been served as a theoretical center point in areas ranging from archaeology and
anthropology (Bateson, 1935; Lightfoot, 1995) to physics, mechanics, and beyond (e.g., Carbone &
Bottiglione, 2008). While all contact theories espouse a focus on the outcome of bringing different
entities together, the most relevant for our purposes appears to be the one outlined in social psychology
(Allport, 1954). That theory is focused on the role of intergroup contact in reducing stereotypes and
prejudices, and its writings identify mechanisms that are key to a positive outcome, for instance, learning
about the outgroup (Pettigrew, 1998; Pettigrew & Tropp, 2008). A meta-analysis by Pettigrew, Tropp,
Wagner and Christ (2011) confirmed three main mediators amplifying prejudice reduction following
contact, including enhancing knowledge about the group, reducing the anxiety about the contact, and
increasing empathy and perspective-taking (the mediational value of enhanced knowledge was not as
strong as that of the other two). Though these variables are yet to be tested for groups differentiated by
national culture, this is a potentially promising path.

9
 Bochner (1982) summarized relevant properties for contact theory as (a) on whose territory the
contact occurs; (b) the time span of the interaction; (c) its purpose; (d) the type of involvement; (e) the
frequency of contact; and (f) the degree of intimacy, relative status and power, numerical balance, and
distinguishable characteristics of the participants. Many of the same properties are relevant at the firm
level. Consider, for example, a joint venture between a foreign and a local firm as opposed to a joint
venture between two foreign firms in a third country. What should be specified in an inter-firm context is
however not only the type of involvement (say, a merger vis-à-vis a joint venture where contact interface
is lower), but also the strategic purpose, whose relationship to the cultural process is rarely discussed
(Morosini, 1998). Similarly, the relative position of the players (e.g., an acquirer versus a target, a
dominant joint venture parent versus a minority parent), which conveys status and power, could make a
difference – contact theory research found that the impact of contact is greater for a majority than a
minority status group (Pettigrew et al, 2011). It is also important to recognize that cultures vary in the
extent to which norms are enforced (Gelfand et al., 2011). In addition, within each culture, specific values
and norms vary in importance. Those perceived to be central and foundational are less likely to be
compromised, while those considered secondary are more likely to be negotiated and traded away. Koch
et al. (2016) applied the concept of value centrality to the study of foreign-Chinese joint ventures, and
confirmed that differences on less central work values generated less conflict and the negative impact
they produced on operation and performance was less pronounced.

From a Unitary to a Relational, Process-Based Approach

A relational, bilateral approach, where entities are considered in terms of their mutual relationship rather
than their independent characteristics, is key to a contact paradigm. Huntington (1996), who clustered
“civilizations” based on cultural, religious and other historical factors, speculated on future clashes among
them based on their differences but also their historical, adversarial contact. Arikan and Shenkar (2013)
studied the impact of historical animosity between countries based on past contact on the formation of
cross-border alliances among their firms. Their findings suggest that collective stereotypes are triggered
not only by how we view other cultures but also by the record of contact between the countries in which
firms are embedded, which can also vary by industry and sector.
The relational approach can be augmented by a dialectical method of the sort employed by Orr and
Scott (2008) for institutional differences. As a byproduct, this could also challenge the static view of
institutional distance (Kostova, 1996), a construct subject to many of the drawbacks of CD. Institutions,
and the values they disseminate, can change with a regime, as McClelland (1963) has shown for China. A
contact-based approach would require studying both cultural and institutional differences (Golesorkhi,
Mersland, Randøy, & Shenkar, 2019; Tung and Verbeke, 2010), because cultural contents are transmitted
via institutions that, in turn, are counterparts to firm exchange. This duality has become a central theme in
economics (Alesina & Giuliano, 2015; for instance, it was the subject of the Presidential Address in the
European Economic Association, see Tabellini, 2008; also Amin & Thrift, 2004, 2007; Thrift & Olds,
1996), but remains relatively rare in IB and strategy/management.
While the need to look at the cultural process, e.g., various decision-making stages, has been
acknowledged in IB (e.g., Beugelsdijk et al., 2018a), the mechanisms (see Zaheer et al., 2012) are better
accommodated in a framework in which parties actually meet. A contact approach would look at how
communication channels, for instance, impact and are impacted by cultural interaction. This would also
allow for the perceptions of cultural differences to change over time. This is not because national cultural
systems change (evidence on that is inconsistent, the World Value Survey shows change while Ronen and
Shenkar (2013; 2017) find remarkable stability (see also Beugelsdijk, Maseland, & van Hoorn, 2015), but
because individual and corporate interpretations of national cultures and their meanings are impacted by
the inter-cultural interaction (Boyacigiller, Kleinberg, Phillips, & Sackmann, 2004).

Staging Contact: Connecting Levels of Analysis

A contact approach requires paying closer attention to how actual actors embed different levels of
analysis. Shenkar and Zeira (1987) use the cultural makeup in cross-border joint ventures as a case in

10
point, delineating which group members bring neither national or corporate culture, nor both, into the
hybrid entity. Nascent efforts can also be found in Weber, Shenkar, and Raveh (1996), who study the
interaction between corporate and national culture, and in Salk and Shenkar (2001), who add the
individual to the mix. Brannen and Doz (2010) laid out the case for bridging the macro strategic with the
micro cross-cultural perspective to advance scholarship that “continues to be dated and unsophisticated
with regard to the complexity of the culture construct” (2010: 239). Indeed, “culture is dynamically
created and enacted by individual members” (Brannen & Doz, 2010: 239; Van Maanen & Barley, 1985),
but how those individuals’ function in their role as strategic decision-makers remains to be explored. As
Fischer and Schwartz (2011) note, variation across individuals is considerably higher than among national
samples (see also Huang & Bond, 2012). Suffice it to say at this point that a contact-based perspective
could and should be tuned to individual actors, embedded as they are in their respective organizations and
nations, and hence to the relationship between individual and national levels attributes, such as that
between tolerance for ambiguity and uncertainty avoidance. Furthermore, a contact-based approach can
monitor the back and forth interactions between actors over time, following a processual, dialectic
method. This would mean, for instance, monitoring how host country constituents react when a foreign
investor dramatically increases its stake in a joint venture, and how that may inform the intercultural
process between the partners.
Relatedly, Boyacigiller, et al. (2004) surface the need to capture the cognitive angle of culture, which
would be consistent with Cyert and March’s (1963) admonition that decisions are made by people, not
firms. Similarly, Dow (2017) recommends operationalization at the individual, actionable level, which is
in line with Bond’s (2002) call for “reclaiming the individual” in culture research, based on evidence that
individual variation typically exceeds that of national aggregates. With the exception of a few anecdotal
references (for instance, an exception to the Uppsala model is explained in the original study in that a
CEO was educated in a host country), individual-level research remains rare, though modest steps have
been taken, e.g., by Puthusserry, Child and Rodrigues (2014), and Williams and Grégoire (2015) who
examined FDI protocols to gauge cultural perceptions. Even studies that invoke social cognition as a
theoretical base (Baack, Dow, Parente, & Bacon, 2015) struggle to explain how individual perceptions
diverge from national averages, and still use the aggregate KSI with its myriad of illusions. Overall, it
seems that Boyacigiller et al.’s (2004: 123) review of the literature, that “national cultural identity
remains separate and distinct throughout the process of interaction” is as true today as it was at the time it
was written.
We also need to incorporate variations within national cultures, as recommended by Shenkar (2001)
and recently pursued (e.g., Dheer, Lenartowicz, & Peterson, 2015). Variations in regional culture have
long been noted in the IB literature (Au, 2000; Huo & Randall, 1991; Lenartowics & Roth, 2001;
Schwartz, 1992) but are rarely applied to global strategic issues. The same is true for variations in
corporate culture, and, in particular the interplay between national and corporate culture (Dong &
Glaister, 2007; Ulijn, Duijsters, & Fèvre, 2010), inclusive of their interaction effect (Weber et al., 1996).
These, too, should be incorporated if we are to approximate a realistic encounter between firms in an FDI
context. Also to be resolved is the inability of the cultural distance formula to accommodate a setting with
more than two players, for instance, a joint venture with three or more parent firms, or a multiple-member
consortium. This limitation has led researchers in multiparty settings to limit their analyses to the two
parents with the largest stake, missing critically important multi-parent dynamics (Gong, Shenkar, Luo, &
Nyaw, 2007). A contact approach would necessitate consideration of all major firm actors, and be
cognizant of the very different dynamics between dyads and triads, for instance (Simmel, 1902).

Strategy and Culture

Another challenge has to do with the interface between strategy and culture, which past literature, before
and after Morosini (1998), has barely noticed. Sirmon and Lane (2004: 306) proposed that “the closer the
domain of a social group is to the value-creating activities of an alliance, the more disruptive cultural
differences between the partners’ members of that social group will be.” Part of the problem is that value
creation tends to vary across governance modes, for instance, in an alliance setting, what constitutes value

11
creation to one party may not be considered as such by the other(s), as is the case for mergers and
acquisitions (Morosini, Shane, & Singh, 1998). Kogut and Singh (1988) found an impact on experience,
but later evidence suggests it is not straightforward. Zeng, Shenkar, Lee, and Song (2013: 59) found that
“when an MNE is new to a dissimilar culture its prior FDI experience in the host culture has a detrimental
effect on subsequent subsidiaries in that culture”, and identified a different learning effect for “host-
proximate” experience as compared to “home proximate” experience. The authors calculated the number
of prior foreign entries before learning was absorbed, showing a threshold, nonlinear impact. By
definition, a processual contact approach is more suited to reveal such effects that are masked under the
cultural distance paradigm.
A processual contact paradigm also implies looking at how cultural interaction may be altered under
changing business circumstances, and not only at the level of strategic intent (Morosini, 1998). Salk and
Shenkar (2001) found that during an industry crisis, the national identification of members of parent firms
rose markedly, undermining cooperation within the cross-border joint venture they were part too. More
recently, Dinner, Kushwaha, and Steenkamp (2019) found that a marketing crisis had a more negative
impact when PD was either very high or very low, again negating the linear assumption of the distance
approach. Overall, we believe that a processual contact approach is much more suitable to address the
current disconnect between culture and strategy.
Finally, we agree with Beugelsdijk et al. (2018a) that comparing extreme country cases may not be a
good idea when pursuing empirical research, and that we should rather select “partially similar cases”
(Przeworski & Teune, 1970), which enables better controls and are yet another way to avoid the treatment
of culture as a residual variable. Longitudinal designs are especially recommended, especially given the
neglect of timing (Mitchell & James, 2001). We should also consider alternatives to survey-based data,
e.g., McClelland’s (1963) content analysis of children’s literature to gauge motivational values across
societies and over time, or, more recently, Santacreu-Vasut, Shenkar, and Shoham’s (2017) use of the
grammatical structure of languages that was shown to offer a better prediction than its equivalent survey-
based measure.

Nascent Application: Friction Models

Without a doubt, a significant driver of the popularity of the CD framework has been the ability to
operationalize cultural differences with a simple formula that offers ease of use combined with ready-
made data. To offer an attractive alternative, a contact-based paradigm would need to offer some level of
measurability, though not at the cost of oversimplification. Shenkar et al. (2008) proposed the general
contours of a general “friction” model of cross-border cultural encounter. It is important to reiterate that
friction itself is a neutral concept, which can lead to positive as well as negative consequences. From an
engineering perspective, friction can be too high, producing drag and energy loss, but it can also be too
low, reducing performance. Relying on the discipline of Tribology, Bowden and Tabor (1973) provide
many examples where friction is a positive, e.g., a tire that should grip an icy road, a shoe that must not
slip on the floor, knots and nails that would not otherwise hold, etc.
Luo and Shenkar (2011: 2) operationalized the friction framework, stating that “with the friction
lens, culture comes to be viewed as being created and recreated by actors who are (1) embedded in
organizational and national identities, possessing divergent resources and interests and holding
asymmetric power and (2) engaged in an ongoing exchange that consists of a chain of responses and
counter-responses.” The authors adapted concepts from physics and mechanical engineering that view
friction as an increasing function of drag pressure, or forces in contact. Drag parameters are mirrored in
load, surface coefficient of friction, speed, and stage. Friction is also a function of ambient conditions
experienced by parties to the contact, and can be curbed by “lubricants” reducing wear and tear. Thus, the
size and type of the transaction, the ‘cultural coefficient of friction’, the pressure for completion, and the
stage of the relationship can be seen as relevant to the success of the transaction. National and
international institutions provide a set of ‘ambient conditions’, while interpersonal relationships, training,
and cross-cultural teaming can be seen as lubricants. This model implies that the components of culture
must be considered for relevance to the transaction-specific construct of ‘cultural coefficient’. As in

12
engineering, every surface has its own coefficient, and no general measure can be applied to all
conditions. Note that from this perspective, cultural friction can also be the dependent variable, which is
impossible to consider with a cultural distance lens. For instance, a joint venture can be imagined to
create a smaller surface ratio than an acquisition, since the former places only portions of each firm in
contact with the other partner(s) (Shenkar et al., 2008), such that even for the same ‘coefficient of cultural
friction’, frictional losses will be greater in the case of the acquisition.
The literature on cultural friction is expanding, ranging from looking at the changing impact of
culture over time (Černe, Jaklič, & Škerlavaj, 2013) to the saliency of cultural differences (Cheok, Hede,
& Watne, 2015) and the impact of the logic of institutions as opposed to the difference between them
(Newenham-Kahindi & Stevens, 2018). Some studies are qualitative, using narrative inquiry (e.g., Cheok,
et al., 2015), interviews (e.g., Rui, Zhang, & Shipman, 2017), and archival data (e.g., Newenham-Kahindi
& Stevens, 2018); others are quantitative (e.g., Li, Liu, & Qian, 2019). For instance, Zeng et al. (2013)
found that rapid expansion has amplified the negative effect of past experience. Li et al. (2019) studied
cultural friction for Chinese SMEs engaged in the Belt and Road Initiative, looking at scope as the
number of destination countries with which a firm comes into contact. This study uses a customized
friction formula that can be adapted to other contexts. Results for both approaches have been promising.

CONCLUSION
The review we have conducted shows that while partial and modest remedies are on offer for some of the
ailments of the CD platform, others persist. In particular, KSI, the linchpin of the paradigm, suffers from
fundamental theoretical, conceptual and rational flaws that have not been corrected and appear to be
irredeemable. Under these circumstances, it is imperative that we consider alternative paradigms to
capture the impact of culture on cross-border business. The proposed friction framework, a contact-based
paradigm, is one such alternative. Future research will tell whether it will become a viable option given its
inherent complexity. Regardless, it is high time for IB scholars to seriously consider alternatives and not
allow a well-cited and seductively simple framework go unchallenged. If we want the IB field to remain
at the forefront of cross-border business research, we should demand nothing less.

13
Notes
1
The sum of papers is more than 613 due to multiple functions of CD in some papers (e.g. hypothesized
both as an independent variable and a moderator, or having one cultural dimension as an independent
variable while calculating CD with other dimensions as a control variable)
2
Incidentally, Sweden, home to the Uppsala model, is a low contact culture as well.

14
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 Table 1: Flaws and Remedies in the Kogut and Singh’s (1988) construct (journals with more than 20 citations)
Illusion noticed but no remedy
No. of empirical No illusion noticed a Empirical remedy provided c
Journal offered b
with KSI
No. of paper % in journal No. of paper % in journal No. of paper % in Journal
JIBS 164 88 54% 15 9% 61 37%
IBR 88 48 55% 11 13% 29 33%
JWB 50 33 66% 10 20% 7 14%
MIR 48 28 58% 6 13% 14 29%
SMJ 48 32 67% 4 8% 12 25%
JIMgt 35 15 43% 6 17% 14 40%
JBR 29 15 52% 8 28% 6 21%
IJHRM 23 9 39% 5 22% 9 39%
JMS 22 13 59% 3 14% 6 27%
AMJ 21 8 38% 4 19% 9 43%
IMR 21 8 38% 7 33% 6 29%
JIMkt 20 12 60% 4 20% 4 20%
GSJ 13 6 46% 4 31% 3 23%
JOM 13 6 46% 4 31% 3 23%
OS 12 6 50% 2 17% 4 33%
MBR 6 4 67% 0 0% 2 33%
Total 613 331 54% 93 15% 189 31%
Note:
a. One reason for the high rate of “no illusion noticed” is that 44% of papers (271/613) citing KSI use it as the control variable
b. Papers only making verbal justification (e.g. not assuming asymmetry effect or it is a popular/widely used construct) is treated as no remedy.
c. All remedies are counted as long as authors are explicit (e.g. including the long-term orientation as an extra dimension to KSI)
JIBS: Journal of International Business Studies, IBR: International Business Review, JWB: Journal of World Business, MIR: Management International Review,
SMJ: Strategic Management Journal, IBR: International Business Review, JIMgt: Journal of International Management, IMR: International Management
Review, IJHRM: International Journal of Human Resource Management, AMJ: Academy of Management Journal, JIMkt: Journal of International Marketing,
JMS: Journal of Management Studies, GSJ: Global Strategy Journal, JOM: Journal of Management, OS: Organization Science, MBR: Multinational Business
Review.

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 Table 2: Common KSI CD illusions and remedies (adapted from Tung and Verbeke, 2010)
Percentage of Percentage of
1
Illusion Remedy provided with remedy total empirical
(N/189) (N/613)
General weakness of Hofstede’s index, e.g. single firm Use multiple cultural classifications: e.g. GLOBE,
37% 11%
survey, comprehensiveness of dimensions Schwartz, Ronen & Shenkar’s clustering (70)

Use Improved formula e.g. Euclidean or Mahalanobis

No correlation between individual dimension in KSI 25% 8%
distance (48)
Aggregating different cultural dimensions into a single
distance measure with the assumption that each dimension Study single dimension effect (44) 23% 7%
is equally important or produces the same impact.

Measured at a single point in time, CD is implicitly Add extra variables as closing mechanism3 or consider
19% 6%
assumed to be constant. other factors (e.g. time) and weighted CD (36)

CD implicitly assumes lack of corporate culture and firm Used designed survey to capture firm-level (managers)
17% 5%
characteristics variance. perception or cultural attributes (33)

Linear relationship between scores for distance measures Use cultural cluster or hypothesized non-liner
15% 5%
and selected dependent variables relationship (e.g., U-shape or S-shape) (29)

Symmetry in scores for distance measures between

Study one direction impact or introduce direction
countries (The distance from point A to point B is 10% 3%
dummy (19)
identical to the distance from point B to point A).

Note:
1. One paper might use multiple remedies, so the sum of the papers is more than 189
2. Number in the quote means the papers provided the remedy to KSI CD
3. Due to the complexity of selecting control variables , counted only when the authors explicitly offer extra variables as a remedy (e.g. Flores &
Aguilera, 2007; Slangen & Hennart, 2008)

24