Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences

Abstract

Cultural distance is a widely used construct in international business, where it has been applied to foreign investment expansion, entry mode choice, and the performance of foreign invested affiliates, among others. The present paper presents a critical review of the cultural distance construct, outlining its hidden assumptions and challenging its theoretical and methodological properties. A comprehensive framework for the treatment of the construct is developed and concrete steps aimed at enhancing rigor are delineated. © 2001, Academy of International Business. All rights reserved.