CULTURAL DISTANCE AND ENTRY MODE CHOICE: A STUDY WITH BRAZILIANS MAJOR TRANSNATIONAL FIRMS

Abstract

This article analyzes the degree of relationship between cultural distance (CD) and the preference of brazilian transnationals when choosing for a entrance mode strategy. Aiming to bring a new perspective on the topic of DC this study seeks to analyze the phenomenon beyond the cultural dimensions of Hofstede, using the theoretical framework of the Globe Project. This study get's a sample of 31 firms that are among the top 100 Transnational Companies (TNCs) in Brazil. Results indicate that the Brazilian TNCs are relatively less willing to choose more risky entrance mode strategies when they operate in culturally distant countries. Firm size also acts as a moderator of the relationship between DC and the entrance mode preference, where bigger firms are less affected by cultural distance when deciding the strategy for international ventures. Finally, the two dimensions of DC (values and practices) shown different relations with entrance mode preference