Journal of International Business Studies

, Volume 41, Issue 9, pp 1460–1480 | Cite as

An institutional approach to cross-national distance

  • Heather Berry
  • Mauro F Guillén
  • Nan Zhou
Article

Abstract

Cross-national distance is a key concept in the field of management. Previous research has conceptualized and measured cross-national differences mostly in terms of dyadic cultural distance, and has used the Euclidean approach to measuring it. In contrast, our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures, including economic, financial, political, administrative, cultural, demographic, knowledge, and global connectedness as well as geographic distance. We ground our analysis and choice of empirical dimensions on institutional theories of national business, governance, and innovation systems. In order to overcome the methodological limitations of the Euclidean approach, we calculate dyadic distances using the Mahalanobis method, which is scale-invariant and takes into consideration the variance–covariance matrix. We empirically analyze four different foreign expansion choices of US companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations, which we make freely available to managers and scholars.

Keywords

incorporating country variables institutional theory cross-cultural management 

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Copyright information

© Academy of International Business 2010

Authors and Affiliations

  • Heather Berry
    • 1
  • Mauro F Guillén
    • 1
  • Nan Zhou
    • 1
  1. 1.Management DepartmentThe Wharton School, University of PennsylvaniaPhiladelphiaUSA

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