Cross Cultural & Strategic Management—Exploring Cultural Arbitrage in Global Entrepreneurship

When:  Sep 1, 2023 from 09:00 to 23:59 (ET)
Associated with  Entrepreneurship (ENT)

Exploring Cultural Arbitrage in Global Entrepreneurship: A Multilevel Phenomena


Arbitrage refers, broadly, to the exploitation of differentials (Denrell, Fang, & Winter, 2003). In a richly interconnected and globalized business landscape, navigating diverse contexts effectively to generate value is a cornerstone of cross-cultural and strategic management (Lumineau, Hanisch, & Wurtz; 2021; Pattnaik, Singh, & Gaur, 2021; Zahra, 2022). Different forms of arbitrage have long been examined as modes of strategy for entering competitive landscapes whereby firms and/or entrepreneurs leverage differences between distinct contexts to generate and capture value (Ghemawat, 2003a). In its core manifestations, arbitrage can consist of juxtaposing economic, administrative, geographic, and cultural differences across markets to develop commercial opportunities explicitly stemming from these national or regional variations (Ghemawat, 2008). 

There is now considerable knowledge surrounding the emergence of the more tangible economic, administrative, and geographic arbitrage opportunities (e.g., Ghemawat 2003b; Jha, Dhanaraj, & Krishnan, 2018; Liu, Al Asady, & Fu, 2020). However, the more intangible cultural arbitrage opportunities remain (comparatively) elusive and less systematically probed (Pidduck, 2022). This is problematic as with the advent of digital technologies, and access to information (Nambisan, 2017), societies across the globe can instantaneously “export” elements of their culture across time and space, increasing and accelerating the abundance of such opportunities for alert entrepreneurs to engage in cultural arbitrage. This special issue seeks to address this scholarly gap and shed light on this increasingly important yet under-examined phenomena. Our call-to-action intends to stimulate research on the big question: how, when, and to what extent can cultural differences stimulate and facilitate the exploitation of entrepreneurial opportunities?
Unlike the elements of other core forms of arbitrage, the cultural ‘raw materials’ underpinning cultural arbitrage possess a combination of unique qualities that make them abundant (within and between nations and/or regions), malleable, pronounced, and enduring. Yet, important questions remain unanswered surrounding how, when, and where firms can better leverage these potentially valuable yet oftentimes untapped strategic resources. Further, as the title of this call suggests, there are especially important linkages between cultural arbitrage and entrepreneurship. Specifically, the contextual demands of new ventures require entrepreneurs to be both novel—in their ideation and value offerings in unforgiving markets—and resource-efficient—in that they are either seeking seed funding or developing ventures with very limited financial runways (Shepherd & Gruber, 2021). Drawing on cultural differences, then, that unveil or generate arbitrage opportunities can be both (financially) uncostly and stimulate substantial potential for unveiling the heterodox ideas entrepreneurship thrives on (Pidduck & Tucker, 2022). 

Recent evidence suggests that individual entrepreneurs leverage the juxtaposition of cultural elements—typically through their own personal cross-cultural experiences (e.g., Pidduck, Shaffer, Zhang, & Clark, 2020; Vandor & Franke, 2016)—to bolster opportunity recognition and creative performance (Pidduck & Zhang, 2021). But more research is needed to unpack and delineate the various multilevel elements, manifestations, efficacy, and boundary conditions surrounding the deliberate deployment of cultural arbitrage as an explicit form of strategy in global entrepreneurship. In 2006, Freidman’s “the world is flat” hypothesis attracted much popular press and scholarly attention and debate for its potential implications on global business in the (then) coming decades. It was predicted, broadly, that in an era of increasing operational globalization and borderless digital communication, the simple arbitrage opportunities would “flatten” out for entrepreneurs as information asymmetries would rapidly dissipate (Friedman, 2006). A decade-and-a-half later and this could be at best explained as an overestimation, or at worst a misguided thesis. Indeed, within international entrepreneurship, there is growing focus on business models used by born globals (i.e., exporting, Cavusgil & Knight, 2015) and born digitals (i.e., internet as collective producer/distributor, Monaghan, Tippman & Coviello, 2020), that specifically avoid culture differentials. Even controlling for global financial crashes, pandemics, wars, and geopolitical shocks during this period, the existence of cross-national cultural differences that underpin the “raw materials” of cultural arbitrage strategies remain completely untouched and unaccounted for in such grand globalization (or “de-globalization”) predictions or theories. 

The purpose of this special issue is to stimulate discussion, analysis, and debate on the how’s, why’s, when’s, and where’s of cultural arbitrage as a mode of strategy in global entrepreneurship. Unlike the econometrics and finance-centric approaches and theories of international business inherited through our discipline’s intellectual trajectory, we place culture at the heart of this strategic lens. Simple cost arbitrage is competed away at a rapid pace in today’s digitalized competitive arena—in this sense, Friedman was accurate, but cross-cultural psychology research finds robustly and repeatedly that distinctive cultural norms and values themselves across different nations are going nowhere—if anything, in times of crisis, they can become even more pronounced (Gelfand et al., 2011; 2021). 

For instance, take the world’s largest economy by purchasing power parity; China is just as “Chinese” today as it was when its economy opened up in the late seventies, and regardless of its growing technology or economic prowess, is likely to be just as culturally “Chinese” decades from now too (Li, 2022). Further, increasingly multicultural societies like the U.S. also afford internal opportunities for leveraging cultural arbitrage opportunities (Vora et al., 2019). What does this practically mean, strategically, for foreign or cultural-minority entrepreneurs navigating opportunities in such commercially important economies? The same can be posited for many other integral emerging economies; India, Brazil, or the most thriving members of the African Union such as Botswana, to name a few (e.g., Nair et al. 2022). Each has a unique cultural landscape that creates opportunities for culturally intelligent and savvy entrepreneurs to leverage when juxtaposed with distinct cultural norms in foreign markets. 

Examples of Cultural Arbitrage

  • U.S. startups in South Korea arbitrage the cultural norms surrounding attitudes towards hiring women in management or leadership positions, hiring local female talent that are overlooked by domestic Korean ventures—generating more diverse and creative teams that eventually translates into commercial advantages (Wei & Hoskinson, 2014). 
  • Western entrepreneurs in Saudi Arabia take advantage of their cultural outsidership and relative social exemption from local taboos and restrictions by filling demand for intimate lingerie (Treleaven, 2016). 
  • The rise of Peruvian entrepreneurs leveraging their expertise and cultural credibility in marketing “Ayahuasca tours’ at scale to wealthy American and European corporate team-building initiatives also highlights cultural arbitrage in action (Hill, 2016).
  • We invite submissions that seek to tackle, probe, theorize, or systemize our knowledge surrounding how entrepreneurs deploy and manage cultural arbitrage.

Question Examples

  • Theoretically, what is cultural arbitrage-domain definition and conceptualization?
  • How do cross-cultural differences create market inefficiencies resulting in opportunities?
  • How do individuals recognize, resource, and decide to exploit cultural arbitrage opportunities?
  • How does cultural arbitrage occur within multinational firms, managerial, resource and process implications?
  • What aspects of the environment are more conducive to cultural arbitrage?
  • In the presence of other types of orientations within firms, does there exist a cultural arbitrage orientation that leads firms to exploit cultural arbitrage opportunities? 
  • Which environmental contingencies influence the relationship between cultural arbitrage and entrepreneurial performance?
  • How and when can interactions between cultural contexts systematically influence the ways people ideate and develop new ventures or corporate initiatives?
  • Do some national cultural characteristics lend themselves better to cultural arbitrate opportunities? If so, in which direction?
  • Are cultural arbitrate strategies sustainable? 
  • Is cultural arbitrage a more commercially effective strategy when combined with other forms (i.e., economic, administrative, or geographic) of arbitrage?
  • How does a nation’s place on the cultural tightness-looseness spectrum enhance or ameliorate opportunities for its domestic ventures to adopt cultural arbitrage effectively?
  • Are some industries more suited to the adoption of cultural arbitrage as an effective strategy than others?
  • What theories from adjacent fields such as cross-cultural psychology or anthropology are helpful for advancing our conceptual understanding of strategic cultural arbitrage?
  • What levels of analysis are under-theorized in cultural arbitrage strategies? Does a different level of analysis fundamentally alter our understanding of how cultural arbitrage functions?
  • Do entrepreneurs “discover” or “create” cultural arbitrage opportunities when initiating or developing new ventures? Or, both? 
  • Is cultural arbitrage mainly a marketing-centric mode of strategy for global entrepreneurship or are there operational elements to be leveraged too?

List of topic areas:

  • Entrepreneurship;
  • Arbitrage;
  • Cultural Differences,
  • Intercultural Dynamics;
  • Cultural Arbitrage;
  • Global Opportunity Development

Submissions Information:

Submissions are made using ScholarOne Manuscripts. Registration and access are available here

Author guidelines must be strictly followed. Please see here

Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to ““Please select the issue you are submitting to”. 

Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.

Guest Editors: 

Robert J. Pidduck, Old Dominion University, USA,

Daniel R. Clark, Ivey Business School, Canada,  

Ahmad Al Asady, North Dakota State University,  

Shirah Foy, Toulouse Business School,

Key deadlines:

Opening date: 1st of April 2023
Closing date for manuscripts submission: 1st of September 2023   


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