Faculty Publications - College of Business

Document Type

Article

Publication Date

2010

Abstract

Globalization has brought about the awareness that culture may play a crucial role in the degree of efficiency or even the success of transactions in international trade. In international business endeavors involving organizations in Korea, differences in national culture may have substantial implications. Hofstede's (1980, 1983) cultural dimensions have been developed and used widely in social sciences research in order to understand the role of national culture in business environments. In this study, empirical analysis is conducted on the influence of these dimensions on the factors of gravity in international trade. Specifically, this study is of an exploratory nature with the objective of identifying which dimensions of culture explicitly influence which factors of gravity so that future investigations may focus on why such relationships exist. This study introduces a possible theoretical basis for testing culture against the gravity model of trade and develops an index of cultural similarity values for Korea and its major trading counterparts based on the Hofstede dimensions. Empirical analysis found significant correlation for similarity in different cultural dimensions for the gravity factors of GDP, per-capita GDP and relative geographic distance. Discussions on the empirical results and the relationship between cultural dimensions and each of these factors is discussed in the context of transactions related to international trade. The current study contributes to the research in theory and practice in the fields of international trade, international business, cross-cultural management and cultural sociology.

Comments

Originally published in The Journal of International Trade and Commerce in 2010,

ISSN: 1738-8112, 2384-1958

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