International market-entry mode decisions: Cultural distanceʹs role in classifying partnerships versus sole ownership

Although the concept of cultural distance (CD) is a fundamental axiom in international business (IB) and has been around for a long time, since 1980 an increasing number of IB publications has quantitatively incorporated it as an independent measure in a wide range of studies. As a contributor to this body of knowledge, Lَpez and Vidal examine the choice between direct investment and joint venture as a function of CD, as well as several additional factors such as linguistic distance and political risk. Placing multiple measures of CD side-by-side is an important contribution of their effort. The 15 models examined demonstrate about 15% improvement over chance in case classification. Further, the absence of significant results in all but two CD measures implicitly supports scholarsʹ reliance on Hofstedeʹs measures. Concurrently, they point at fundamental issues that relate to their contribution. This commentary highlights areas related to market entry and CD to which greater attention would be helpful in future research.