The effect of culture on the responsiveness of firms to mimetic forces: Imitative foreign joint venture entries into China, 1985–2003

Institutional theory suggests that firms imitate their peers when deciding to enter a foreign market in order to gain legitimacy and cope with uncertainty. There is little investigation, however, on how home country culture affects a firm's mimetic behavior as a response to institutional influences. To understand culture's role, this paper examines the effect of the cultural environment on mimetic foreign joint venture entries into China. Based on a sample of 1361 international joint venture entries in the 1985–2003 period, we find that the cultural dimensions individualism–collectivism and power distance significantly affect the responsiveness of firms to mimetic forces.