positive impact oh cultural diversity on global firm

Abstract: A longitudinal research design was used to examine the relationship between international diversification and firm performance by observing Fortune 500 firms' international involvement from Jan 1985 to Jan 1994. Results suggest that a firm's international expansion concerning cultural relatedness or unrelatedness does not affect accounting or market measures of performance. Increased heterogeneous cultural environments were also found not to cause declines in performance returns of international firms.

Author's Abstract: COPYRIGHT 1997 Academy of International Business

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 ...