The Impact of Political Culture on Firms' Choice of Exploitation–Exploration Internationalization Strategy

Abstract

This article discusses the impact of political culture on the exploitation–exploration internationalization strategies of firms. In particular, we propose that four dimensions of political culture – nationalism, internationalism, patriotism, and cosmopolitanism – influence firms’ willingness to explore new opportunities and/or to exploit existing products and capabilities across borders. We suggest that firms in nationalist home country cultures are more likely to pursue exploitation strategies, whereas those in cosmopolitan cultures are more likely to pursue exploration strategies. For firms embedded in patriotic or internationalist cultures, a mix of exploitation and exploration internationalization strategies might be the more likely choice. We conclude that these political culture dimensions may be useful to understand and predict many firm-level strategic choices, such as the type of internationalization strategy pursued, the choice of foreign entry mode and location, and decisions concerning the management of foreign subsidiaries.