CULTURAL INFLUENCES ON ENTRY MODE CHOICE IN INTERNATIONAL BUSINESS: AN ASSESSMENT AND REVIEW

The aim of this paper is to provide a reflection on how academic production in International business has approached culture and its influences on entry mode choice. This paper provides: a theoretical basis for systematically interrelating the literature into four propositions: propositions about both horizontal and vertical joint ventures and different levels of profitability in an industry; the relationship between perceived cultural distance for joint venture or wholly owned subsidiaries, and finally, the role of trust and inward FDI and uncertainty avoidance. The cultural factors and investments risks and cultural factors and trust relationships on entry mode choice literature are reviewed in the context of such propositions, and it is possible to identify, depending on the level of cultural distance, that it certainly affects the relationship between countries in the process of deciding for an entry mode. The level of trust plays an important role when the MNE is looking for local partners, aiming to cease any possibility of investment risks.