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Open AccessArticle

Cultural Distance and Entry Modes in Emerging Markets: Empirical Evidence in Vietnam

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The Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, District 3, Ho Chi Minh City 700000, Vietnam
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Faculty of Economics and Public Management, Ho Chi Minh City Open University, 97 Vo Van Tan Street, District 3, Ho Chi Minh City 700000, Vietnam
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Department of Planning and Investment Binh Thuan Province, 290 Tran Hung Dao Street, Phan Thiet City 800000, Vietnam
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Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2020, 13(1), 14; https://doi.org/10.3390/jrfm13010014
Received: 11 August 2019 / Revised: 4 November 2019 / Accepted: 5 November 2019 / Published: 10 January 2020
(This article belongs to the Special Issue Contemporary Issues in Business and Economics)
Cultural distance is acknowledged as a crucial factor that significantly affects the entry mode selection of multinational enterprises. The purpose of this article is to analyze the relationship between cultural distance and entry mode choice by exploring a novel dataset of 5236 firms in Vietnam with foreign investment during the period 2005–2016. Although many studies were conducted about the cultural distance and entry mode nexus, most of the research mainly focuses on developed and developing countries, where a market economy is already established. It is important to expand the research to a transition economy such as Vietnam, where the government is committed to attracting foreign investment. The results indicate that, when the cultural difference between Vietnam and their home country is high, foreign-invested firms prefer wholly-owned subsidiaries (WOS) over equity joint ventures (EJV). The study contributes to the general understanding about cultural distance and entry mode decision of foreign-invested firms in emerging markets. View Full-Text
Keywords: cultural distance; entry mode; equity joint venture; wholly owned subsidiary cultural distance; entry mode; equity joint venture; wholly owned subsidiary
MDPI and ACS Style

Ha, N.M.; Binh, Q.M.Q.; Dang, P.P. Cultural Distance and Entry Modes in Emerging Markets: Empirical Evidence in Vietnam. J. Risk Financial Manag. 2020, 13, 14.

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