The Impact of Cultural Diversity on the International Joint Venture (IJV) Performance: The Case of Top Management Team of IJV Firms in Thailand

Abstract

This study has focused on the mediating effect of four mediators: conflict, social integration, effective communication, and creativity on the relationship between cultural diversity of top management team and international joint venture (IJV) performance in Thailand. Also, the direct impact of cultural diversity on IJV performance has also been investigated. The Board of Investment of Thailand has provided the original dataset, an official database of IJV firms that operate in Thailand as the population of the study.  Mail survey has been adopted as the main mode of data collection. The 650 postal questionnaires in Thai and English were sent to the sample companies, addressed to the target respondents of this study, the chief executive officer (CEO) or managing director of the IJV operating in Thailand. The response rate was 14%. The findings indicated that cultural diversity negatively affected on social integration. Furthermore, social integration and creativity had positive impact on IJV performance.  The direct negative effect of cultural diversity on IJV performance has also been found. Last but not least, the findings showed that above-mentioned mediators partially mediated the association between cultural diversity and IJV performance. The results of this study are both consistent and contradict to previous studies.  This is an original attempt to fill a knowledge gap in the literature especially in the ASEAN country context of Thailand.