Why We Should Stop Using the Kogut and Singh Index

Abstract

The Kogut and Singh (J Int Bus Stud 19(3):411–432, 1988) index is the most widely used construct to measure cultural distance in international business and management research. We show that this index is incorrectly specified and captures the squared cultural distance. This inaccuracy is problematic because it means that the empirical findings on the effects of cultural distance presented in different strands of international business research are likely to be misleading. We specify the correct form of the distance measure based on the Euclidean distance formula and demonstrate the implications of using the incorrectly specified Kogut and Singh (1988) index.