Indian Journal of Science and Technology

Abstract

Objectives: International business study tests the way national culture effects life insurance companies. Culture tends to have a strong influence on individual behavior under of uncertainty and ambiguity. Methods/Statistical Analysis: To proxy for national culture dimensions we choose to adopt the Hofstede and GLOBE (Practice/Value) project cultural dimension and collect data across 28 joint-ventured life insurance companies in China from 2004–2013 periods. Findings: According to the study, national cultural differences showed greater effect on financial performance of the life insures than organizational cultural difference and positive or negative effect in the financial performance of the joint-ventured life insurance companies in accordance with each dimension of cultural distance. The results are strongly support, even after controlling for environmental, life insure-specific, economic variable. Cultural factors play as a strong explanatory variable and impose more influences on financial performance during international investment cooperation. Hofstede cultural dimensions effect on earned premium income is statically significant [F=12.798***, β=0.039, T=2.916*]. The finding is interesting in that the higher individualism and long-term orientation, lower masculinity that foreign companies are, the more positive effect on financial performance that foreign company accomplish. GLOBE (Practice) cultural dimension effect on earned premium income is statically insignificant [F=11.838***, β=1.863, T=2.110]. Therefore the higher in In-group collectivism and Performance-orientation those foreign companies are, the more positive effects on financial performance that foreign companies accomplish. GLOBE (Value) cultural dimension effect on earned premium income is statically insignificant [F=13.123***, β=2.919, T=3.142**]. Therefore, the higher in Institutional-collectivism and Gender-egalitarianism those foreign companies are the more positive effects on financial performance that foreign companies accomplish. The lower performance-orientation that foreign companies are, the more negative effects on financial performance that foreign companies accomplish. Improvements/Applications: Therefore it is recommended to take cultural factors into consideration for firm`s future international investment cooperation in China.

Keywords: Cultural Difference, Financial Performance Joint Venture, Life Insurance Companies