The Role of Culture in Foreign Direct Investment and Trade: Expectations from the GLOBE Dimensions of Culture

Raymond Mac-Dermott; Dekuwmini Mornah

doi:10.4236/ojbm.2015.31007

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The Role of Culture in Foreign Direct Investment and Trade: Expectations from the GLOBE Dimensions of Culture

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DOI: 10.4236/ojbm.2015.31007 4,677 Downloads 6,258 Views Citations

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Raymond Mac-Dermott^*, Dekuwmini Mornah

Affiliation(s)

Virginia Military Institute, Lexington, VA, USA.

ABSTRACT

This paper offers qualitative analysis of the impact of culture on international business. In particular, we discuss the potential impact of each of the nine cultural dimensions that were established by the Global Leadership and Organizational Behavior Effectiveness Research Program, which is led by Robert J. House, on the decision to trade with or invest in another country. The analysis finds characterizations of source- and destination-country are important for each dimension when deciding between trade and FDI. Given the potentially conflicting recommendations, the dimensions are placed in a hierarchy to distinguish those most in need of consideration from those of secondary import.

KEYWORDS

Culture, Trade, Foreign Direct Investment

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Mac-Dermott, R. and Mornah, D. (2015) The Role of Culture in Foreign Direct Investment and Trade: Expectations from the GLOBE Dimensions of Culture. Open Journal of Business and Management, 3, 63-74. doi: 10.4236/ojbm.2015.31007.

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