Abstract

This paper addresses the issue of how three cultural factors i.e. cultural distance between countries, focal firm's prior experience in host country culture, and firm-level cultural diversity affect firm's choice of international strategic combination mode between M&A and joint ventures. Rooted in organizational learning approach to internationalization, our model specifies firm-level cultural diversity as a key determinant of mode choice. Empirical support was found in a sample of U.S. firms.