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The moderating effects of national culture on escalation of commitment

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  • Salter, Stephen B.
  • Sharp, David J.
  • Chen, Yasheng
Abstract
This study tests the cross-cultural sensitivity of three determinants of escalation of commitment: agency conditions, negative framing, and self-justification. A multiple-case experiment, using a sample of 1208 managers and MBA students surveyed over several years in nine countries investigated the moderating effects of national culture. We find that the effect of negative framing on escalation of commitment is significant, but unaffected by differences in national cultures. The adverse selection problem arising from agency predictions has a stronger effect in high-individualism countries than in low-individualism countries, and managers in higher long-term orientation countries are more likely to escalate projects with potential long-term payoffs.

Suggested Citation

  • Salter, Stephen B. & Sharp, David J. & Chen, Yasheng, 2013. "The moderating effects of national culture on escalation of commitment," Advances in accounting, Elsevier, vol. 29(1), pages 161-169.
    • Handle: RePEc:eee:advacc:v:29:y:2013:i:1:p:161-169
    DOI: 10.1016/j.adiac.2013.02.001
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    References listed on IDEAS

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    Cited by:

    1. Schneider, Claudia R. & Fehrenbacher, Dennis D. & Weber, Elke U., 2017. "Catch me if I fall: Cross-national differences in willingness to take financial risks as a function of social and state ‘cushioning’," International Business Review, Elsevier, vol. 26(6), pages 1023-1033.
    2. Alejandro Montecinos‐Pearce & Pablo Rodrigo & Ignacio J. Duran, 2020. "When is escalation of commitment unstoppable in group settings? An iterative economic modeling approach to unveil the dark side of group decision‐making," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1387-1402, December.
    3. Björn Röber, 2020. "Escalating internationalization decisions: intendedly rational, but only limitedly so?," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 455-484, July.
    4. Driouchi, Tarik & Trigeorgis, Lenos & So, Raymond H.Y., 2020. "Individual antecedents of real options appraisal: The role of national culture and ambiguity," European Journal of Operational Research, Elsevier, vol. 286(3), pages 1018-1032.

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