Cultural heterogeneity and cross-border cooperation: conceptualization and construct development

In this paper, a new construct, cultural heterogeneity, with which to capture culture differences in a cross-border cooperation setting, is introduced. The construct, based on the representation of intersecting cross-border entities in national culture clusters, is posited as an independent variable whose impact on cross-border joint venture formation and performance is contingent on the relational attributes of the intersecting entities. The construct is tested on a sample of China-based cross-border joint ventures. The findings suggest that the effect of the construct on venture’s performance is contingent on joint decision making and goal congruence among partners. Neither main effect nor contingent effect is found for traditional cultural distance measures.