۱- Introduction

۲- Literature review and hypotheses

۳- Method

۴- Results

۵- Discussion

References

Abstract

This paper investigates the impact of within-country religious diversity on the performance of private participation infrastructure projects. Our analysis of 8139 projects in 33 countries (1990–۲۰۱۴) shows that higher levels of within-country religious diversity are associated with a higher risk of project failure. This negative effect is exacerbated in greenfield projects and when a project’s main sponsor is a foreign firm. In contrast, we find no moderation effect for local government ownership. The study contributes to the ongoing debate regarding the effects of within-country diversity on foreign business ventures.

Introduction

Scholarly interest in within-country diversity has increased in recent years in response to the critique that this type of diversity is ignored in studies of cross-country differences (Shenkar, 2001, 2012; Tung, 2008). Challenging the assumption of within-country homogeneity, recent studies have offered fine-grained insights into the effects of withincountry diversity on foreign-investment decisions and performance (Beugelsdijk, Maseland, Onrust, van Hoorn, & Slangen, 2015; Beugelsdijk, Slangen, Maseland, & Onrust, 2014; Dow, Cuypers, & Ertug, 2016). However, the evidence to date has been mixed. Beugelsdijk et al. (2014) suggest that multinational enterprises (MNEs) are more likely to focus on culturally similar customer segments when within-country diversity is greater. On the other hand, Dow et al. (2016) maintain that within-country religious and linguistic diversity hampers information-gathering efforts in cross-border acquisitions, thereby increasing the potential problems of ex-ante information asymmetries and ex-post behavioral uncertainty. Moreover, while these studies have shown that within-country diversity has an effect on MNE affiliates’ sales and decisions concerning the equity share in crossborder acquisitions, little is known about how within-country diversity affects business ventures in which local and/or foreign firms must work closely together. Our study focuses on religion as one element of within-country diversity that affects local and foreign firm collaborations in the context of private participation infrastructure projects. Religion is a focal point of analysis in several papers that pay special attention to consumer and consumption behavior (Cleveland, Laroche, & Hallab, 2013; Engelland, 2014; Jamal & Sharifuddin, 2015; Minton, Kahle, & Kim, 2015; Montgomery, 2003). However, the extant literature has not considered the effect of religion at the presence of firm foreignness and inter-firm collaboration. Dow et al. (2016) analyzed the impact of religious beliefs on MNEs’ decisions in relation to foreign acquisitions, but not inter-firm collaboration. Beugelsdijk et al. (2014) investigated the latter, but from a point of linguistic differences. Therefore, our study is the first to investigate within-country religious diversity effects in projects consisting of legally independent organizations.