We test the hypothesis that culturally related international diversification will have a positive impact on firm performance and that the opposite will be true for culturally unrelated globalization. Cultural diversity for Fortune 500 firms was used to predict performance over a ten-year period (1985–1994), controlling for several organizational and industry characteristics. Regression tests using nine indicators of cultural diversity revealed no significant cultural effects. Alternate interpretations are offered.
Cultural Diversity and the Performance of Multinational Firms
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