Geometrical Measurement of Cultural Differences

Abstract

Differences and similarities between countries, regions, and cultures lie at the core of international business, and they are often measured in the form of a distance index originally proposed by Kogut and Singh. Because research results using this index are ambivalent, critical observers have challenged the concept and proposed partial remedies in the form of a standardized Euclidean or Mahalanobis distance measure. This article suggests a different avenue, construes culture as a weight vector based on Hofstede’s cultural dimensions, and specifies a geometrical difference measurement using the angle of heterogeneity between two such vectors. Its performance is assessed using a mathematical simulation and an empirical example from the field of export marketing, which considers the effect of culture on bilateral export flows.