THE RELATION BETWEEN CULTURAL DISTANCE AND VIETNAMESE ENTERPRISES’ EXPORT INTENSITY

Abstract

This paper aims to study the relation between cultural distance and export volume of Vietnamese enterprises. Based on Transaction Cost Theory developed by Hennart (1991), the author hypothesizes that the further the cultural distance between Vietnam and its import partner, the lower the export intensity is. The survey data of Viet Nam Statistics Office on 162 export firms are used to test the proposed hypothesis. Empirical results from Tobit non-linear regression indicate that the hypothesis is strongly supported after characteristics of enterprises are controlled. Managerial implications are also suggested in this paper.