Cultural Proximity and Firm Innovation: The Moderator Role of Digital Technologies

The paper explores the concept of cultural proximity and its effects on firm innovation, paying specific attention to the moderator role played by digital technologies. In order to improve the innovative performance, firms should construct and maintain relationships with the members of other organizations and should develop and take care of the relationship between the members inside the firm. Previous studies show that innovation is easily reached through the joint efforts of different actors, such as competitors and suppliers, and customers. Cultural proximity refers to cultural compatibility, identity, and shared creativity norms of organization members or between different firms. Similar firms can communicate, transfer, and acquire knowledge more effectively and efficiently. In this paper, we explore the relationship between cultural proximity and innovation. Moreover, we investigate the moderator role of digital technologies on the relationship between cultural proximity and firm innovation. The development of digital technologies allowed firms to implement a remote production control and to promote innovative forms of work organization such as smart working. After the digital revolution, people started to adopt different tools to communicate, cooperate, and be connected with. The virtual face-to-face interactions facilitates economic activities; digital technologies enable the development of shared values stimulating collaborations and interactions between people located in different places. The relationships between people belonging to different cultures (i.e., with low cultural proximity) are facilitated by employing digital tools. Developing testable propositions, we contribute to the debate about the importance of cultural proximity and the development of digital-based interactions on innovative activities.