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PurposeThe psychic distance often hinders the interaction between cross-border e-commerce (CBEC) and consumers. This paper aims to discuss the issues of psychic distance of consumers in the CBEC. In addition, it attempts to explain the factors that affect psychic distance from three dimensions of culture, economy and politics and the two different shopping behaviors caused by psychic distance.Design/methodology/approachThis research incorporates both theoretical and empirical studies. In this study, 249 validated questionnaires were selected from 300 Chinese CBEC consumers by snowball sampling, and the relationship between variables was tested using structural equation model (SEM). This was done through online research, and it is ensured that the data obtained are first-hand information.FindingsThe paper suggests the theoretical model operationalizing CBEC psychic distance and the empirical analysis results show that all the six influencing factors have a positive impact on the psychic distance of consumers. Logistics infrastructure barriers in the economic dimension are confirmed as the major influencing factor, and the significance of the political dimension is relatively small. Based on consumers' uncertainty of various kinds of information, psychic distance subconsciously causes consumers to deviate in the cross-shopping process.Originality/valueCurrently, research on e-commerce mainly focuses on saving trade costs and improving consumer welfare, while research on the internal impact of CBEC on consumers is insufficient. Psychic distance is a new concept in the field of cultural and social research. The originality of this paper is that the concept of psychic distance has been extended from overseas invested enterprises to research with CBEC consumers as the selected object. The obstacles of CBEC have been widely studied, but few are related to the closeness of consumers, or the inner feelings of consumers are ignored. In the context of CBEC, this paper lists the actual external factors and potential threats that may affect consumers' consumption concerns of CBEC from three dimensions. The real emotions of consumers in the face of these difficulties indirectly affect the purchase satisfaction and reduce the purchase desire. Consumer psychic distance is a real phenomenon in cross-border shopping, and it is almost inevitable for these difficulties. On the premise of inevitability, high psychic distance will slow down cross-border shopping in the eyes of consumers.

Purpose: Based on the various streams of distance literature in management, a framework is provided to make discourses on distance clear. Design / Method / Approach: After a review of the most relevant distance concepts, a typology with five categories is introduced, which are then applied to the most relevant distance concepts in management. Findings: A clear typology helps to clearly define and differentiate the various streams of distance literature. Theoretical Implications: With the conceptual categories ‘topic’, ‘dimensionality’, and ‘level of analysis’, and the empirical categories ‘variables’ and ‘distance calculation’, distance concepts become more consistent. Practical Implications: With a terminology for the different aspects of distance, practitioners can focus more clearly on specific remedies to bridge distance. Originality / Value: The paper offers a new typology of different elements of distance. Research Limitations / Future Research: The introduced typology will aid in the discussion of distance in management. Paper type: Conceptual

PurposeThe purpose of this paper is to assess how the transfer of explicit and tacit knowledge is affected by the knowledge disseminative capacity of a foreign parent firm, with an emphasis on the moderating role of psychic distance, by developing and testing a theoretical model of international joint venture (IJV) learning.Design/methodology/approachThe author tested the hypotheses with survey data collected from 199 IJVs in South Korea, estimating a structural equation model using AMOS 23.0.FindingsThe author found that the capacity of the foreign parent to disseminate knowledge to the IJV has a greater impact on explicit knowledge transfer than tacit knowledge transfer. He also found that the relationship between disseminative capacity and explicit knowledge transfer is significantly moderated by psychic distance, but the relationship between disseminative capacity and tacit knowledge transfer is not.Originality/valueThe results are critical for IJVs and parent firms seeking to improve knowledge transfer, as they establish the importance of parent firms’ disseminative capacities and the moderating role of psychic distance in the process of both tacit and explicit knowledge transfer. This research addresses the research gap regarding disseminative capacity by providing empirical evidence.

Studies have questioned the beneficial effects of exporter–importer cooperation by showing, without explaining, that it may not have a positive effect on performance. We contend that cooperation carries the genes of its own demise. We develop a model drawing insights from exchange theory and the dark-side perspective of social relationships, which we then test using two consecutive data collection efforts with exporters. Results suggest the influence of cooperation on exporter market performance has an inverted U shape; at high levels, the effect of cooperation on performance fades and becomes negative. Further, this effect is indirect. Cooperation must first influence the importer’s behavior, via its specific investments, to improve the exporter’s market performance. Moreover, we find that lower levels of interdependence increase the effect of low to moderate levels of cooperation on importer’s specific investments, and that the effect of cooperation on investments is impervious to psychic distance. Our results caution that more cooperation with foreign distributors is not always better and can hurt export performance. Indeed, export managers should not expect a simple, systematically positive, and direct relationship between cooperation and exporter market performance.

Prior research suggests that corporate boards and directors play important roles in firm strategy and performance. In this paper, we examine an important yet underexplored avenue and focus on their role in overcoming multilevel psychic distance (PD) faced by internationalizing small- and medium-sized enterprises (SMEs) originating from an emerging market. Analyzing Indian Fintech SMEs, using multiple case studies, our findings reveal that boards contribute important network-level resources and knowledge about foreign markets, which in turn assists internationalizing SMEs in mitigating PD. We demonstrate that the human and social capital of boards’ play important, yet, distinctly different, roles in mitigating PD at pre- and post-internationalization phases. At the pre-internationalization phase directors’ prior international and industry experience, as well as board interlocks and prior connections, are most valuable, whereas, at the post-entry phase, transnational boards, and those with stronger trust-based personal relationships (i.e., greater depth of social capital (Haynes and Hillman, 2010), facilitate faster experiential learning. Taken together, our findings contribute novel insights into the mechanisms through which boards affect the outcomes of firms operating, and originating from, extreme institutional environments. We further draw implications for research and practice.

PurposeThe aim of this study is to explore the drivers of the evolution of a subsidiary’s strategic role from an ordinary subsidiary into a springboard subsidiary in multinational corporations, paying special attention to the role of subsidiary management in this transformation.Design/methodology/approachThe authors apply a case study methodology to analyse the transformation of three Spanish subsidiaries of European multinational companies into springboard subsidiaries to pursue opportunities in the Latin American region.FindingsThe results present evidence that the development of a springboard subsidiary’s role is influenced by a set of preliminary factors that include: (1) the coincidence of a favourable economic change in the target region of expansion and unfavourable market conditions in the springboard subsidiary’s home market; (2) location-specific advantages of a subsidiary that allow it to develop unique capabilities, such as the ability to reduce the psychic distance between the headquarters and target region, to balance intra-regional conflicts within the target region, and to effectively transfer knowledge from the headquarters to the target region; and (3) micro-political headquarters-subsidiary negotiation processes as a result of the subsidiary’s strong initiative, peculiarities of the structure of a multinational company, and a strong dependency of the headquarters on the subsidiary’s unique capabilities.Originality/valueThe study contributes to the International Business literature by providing an in-depth analysis of the evolution of springboard subsidiaries and explaining how ordinary subsidiaries located in saturated markets can trigger organisational change and achieve the extension of their strategic role.

Este paper investiga cómo la distancia psicológica con los mercados destinos de las exportaciones afecta el éxito de internacionalización. Utilizando datos de CORFO (Corporación de Fomento a la Producción) en Chile, se estiman modelos de regresión Probit en dos etapas. Por una parte, los resultados muestran que las empresas que deciden vender a una alta distancia psicológica tendrían mayores opciones de éxito. Por otra parte, la experiencia previa en emprendimientos sería importante en la decisión de exportar a altas distancias psicológicas. Así, los responsables de política pública deberían tener en cuenta aquellos factores al momento de tomar decisiones. Algunas limitaciones de este estudio están relacionadas al uso de datos de corte transversal pasando por alto posibles problemas de endogeneidad. Sin embargo, y a diferencia de trabajos previos, la metodología utilizada intenta corregir el inherente sesgo de selección presente en el tópico de investigación. Los resultados de este trabajo son importantes para fomentar en Chile a que sus born globals enfoquen sus operaciones en los más atractivos y lejanos mercados internacionales.

We investigate how informal social networks can assist multinational firms in their internationalization strategy. We propose a refinement of the Uppsala internalization model (Johanson & Vahne, 2009) grounded in network theory, by developing an intermediate position between an ‘insider’ and an ‘outsider’ for conditions when the transformation of an outsider into an insider is limited by institutional constraints. An intermediary position represents one of the sides of ‘patron-client’ informal networks (Denoeux, 1993) whereby the other side is represented by the ‘insider’. We argue that this setup would help mitigate the Liability of Outsidership (Johanson & Vahne, 2009), a replacement of the Liability of Foreignness (Hymer, 1976; Zaheer, 1995), in the modern networked business world. We contextualize our proposition for the case of Iran, a large rising West-Asian economy with known institutional limitations, and suggest that the informal network of local merchants (bazaaries) could play an important intermediary role in Multinational Enterprises (MNEs) internationalization process. We review the history ofbazaariesand make a series of propositions exemplifying possible ways informal networks could influence the internationalization process. In addition to re-affirming the importance of the MNE country of origin (emerging markets, and low psychic distance with Iran), we propose that an intermediary of the Iranianbazaarieswill have a positive impact on performance and survival of the MNE's subsidiary in Iran, especially in the case of incongruence of MNE's leadership with Shi'a Islam. Additionally, we suggest that employing the Iranian diaspora may also improve subsidiary performance and survival.

Two important phenomena have increasingly been noted in relation to small firms: they are internationalising more often and early in their life cycle. However, less is known about the other process dimensions of small firm internationalisation, particularly about the number of international markets small firms venture into, their choice and geographic scope of international markets, and levels of commitment in these markets. If we follow the internationalisation process models, we can assume that small firms will gradually internationalise and increase their commitments to psychically close international markets. However, as this empirical study using multiple case study methodology shows, recent internationalisers are internationalising to multiple and distant markets across a broader and global geographic scope with a low and fluctuating international market commitment. This internationalisation behaviour reflects “compressed internationalisation” involving the compression of internationalisation processes across distances and geographic markets. Although compressed internationalisation has largely been enabled by the new international environment, internationalisation strategy and international entrepreneurial orientation influence whether a firm engages in compressed internationalisation.

PurposeThis study investigates the effect of psychic distance (PD) on outward foreign direct investment (OFDI) by multinational firms originating in emerging economies and the moderating effect of firm heterogeneity on this relationship.Design/methodology/approachAn empirical analysis based on a negative binomial regression model is conducted using OFDI data from 2008 to 2017 on companies listed on the Shanghai and Shenzhen Stock Exchanges in China, an emerging economy.FindingsThe results suggest aU-shaped relationship between PD and OFDI by firms in emerging economies. Both executive foreign experience and state ownership negatively moderate theU-shaped relationship between PD and OFDI.Practical implicationsEmerging economies should encourage and guide multinational firms in engaging in OFDI and emphasize the advantages and disadvantages of PD for multinational firms. Additionally, non-sate-owned firms should recruit those who have a foreign education to provide support for OFDI by firms in emerging economies. Multinational firms should determine investment locations by consulting with executives with foreign experience to improve their ability to engage in OFDI.Originality/valueThis study combines macro and micro perspectives and integrates PD and firm heterogeneity into the same model with a sample of multinational firms originating in China. The findings support the existence of a PD paradox, which helps to enriching the theory on foreign direct investment.

The article reconstructs the main directions of development of English humanistics during the second half of the 19 th century. It has been shown that the achievements and mistakes of the English model of humanism should be considered as the basis that, at the turn of the 19 th - 20 th centuries, contributed to its entering to the European cultural space, where the commitment to Franco-German culture creation was quite powerful. The importance of the concepts of neo-Hegelianism, positivism, and “synthetic philosophy” has been highlighted, on the foundation of which “aestheticism”, “neo-positivism”, and “educating through art” were formed, which played a significant role in the formation of the fundamental principles of the European philosophical and aesthetic platform of the first half of the 20th century. English humanistics of the second half of the 19 th - early 20 th centuries developed in several directions, actively using the principle of “marginal analysis”, combining a number of human sciences while studying complex problems. This tendency had both positive consequences: one area of knowledge complemented the research space of another; and the negative ones: sometimes “marginal analysis” “dissolved” the content of a particular humanitarian sphere. Besides, the English humanistics revised both problems that rested on certain traditions of national humanism, as well as fundamentally new ones, the understanding of which formed links with the theoretical searches of representatives of other European countries, namely, the origin of art, the correlation of aesthetic, moral and psychological, “psychic distance”, etc. On top of that, English humanistics of a given period requires a personalized approach. The efforts of English theorists to maintain theoretical parity in the research area were not justified, they were deformed toward aesthetic and psychological analysis when sociology and physiology were on a periphery. The idea of Spencer’s “synthetic philosophy” was not widely supported either. Instead, in the first decades of the twentieth century, thanks to the English model of neo-positivism, the philosophy of positivism reinforced its position in the European cultural space.

увеличением темпов глобализации, развитием транспортных и информационных технологий, вовлечением в международную торговлю большого количества компаний разного размера всё более широкий спектр факторов оказывает влияние на объём и географическую направленность торговли. В этой статье проверяется гипотеза, что при выходе на зарубежные рынки важную роль, наряду с географической дистанцией и ВВП стран-партнёров (классическая гравитационная модель) должна играть так называемая «психологическая дистанция». Сингапур, Гонконг, Республика Корея и Тайвань – экономики Азиатско-Тихоокеанского региона, которые показывали впечатляющие результаты развития с конца XX в. Одна из причин быстрого роста – ориентированность экономик на экспорт. В структуре внешней торговли «азиатских тигров» первичные товары составляют не более 2%. В то же время, экспорт именно производственных товаров, для которых характерно непостоянство качества, неоднородность и наличие специфических характеристик, должен быть подвержен сильному влиянию психологической дистанции. Успех таких товаров на иностранном рынке во многом зависит от индивидуальных ка-честв товара и маркетинговой стратегии продавца. В данной статье представлены результаты исследования влияния ряда факторов, помимо лежащих в основе грави-тационной модели, на экспортные потоки четырёх «азиатских тигров» – Сингапура, Гонконга, Южной Кореи и Тайваня в 88 стран. С помощью регрессионного анализа была протестирована связь между независимыми переменными (культурная дис-танция, прочие определяющие факторы психологической дистанции, разница во времени и наличие соглашений о свободной торговле) и объёмом экспорта в каж-дую из 88 торговых стран-партнёров. В качестве контрольных переменных высту-пили показатели гравитационной модели (физическое расстояние и ВВП). По ре-зультатам исследования авторы пришли к выводу, что полная картина зависимости экспортных потоков, в частности от психологической дистанции, неоднозначна. Возможно, существующие модели измерения психологической дистанции на уров-не страны требуют изменений, пересмотра включаемых факторов. Ключевые слова: международная торговля, экспорт, гравитационная модель, культурная дистанция, психологическая дистанция, определяющие факторы психо-логической дистанции, «азиатские тигры», Гонконг, Сингапур, Тайвань, Республи-ка Корея, регрессионный анализ. As the pace of globalization accelerates, the transport and information technologies develop even more rapidly, and a large number of companies of different sizes get involved in international trade, wider range of factors affect the volume and geographic focus of trade. This article tests the hypothesis that while entering foreign markets, along with the geographical distance and GDP of partner countries (the classical gravity model), the "psychic distance", also, plays an important role. Singapore, Hong Kong, South Korea, and Taiwan are the economies of the Asia-Pacific region that have achieved impressive development goals since the end of the 20th century. Rapid growth was partially triggered by the export orientation of these economies. In the foreign trade structure of the "Four Asian Tigers", primary goods make up no more than 2%. At the same time, the exports of manufactured goods – which exhibit inconsistency in quality, heterogeneity, and various specific features – should be strongly influenced by the psychic distance. The success of such products sales in the foreign market largely depends on the individual qualities of the product and the seller's marketing strategy. This article presents the results of a study of the influence of a number of factors, in addition to those underlying the gravity model, on the export flows of the "Four Asian Tigers" (Singapore, Hong Kong, South Korea, and Taiwan) to 88 countries. The relationship between the ex-planatory variables (cultural distance, other determinants of psychic distance, time differ-ence and the existence of free trade agreements) and the volume of exports to each of the 88 trading partners was tested by using regression analysis. The gravity model indicators (physical distance and GDP) were used as control variables. Based on the results of the study, the authors came to the conclusion that the complete picture of the dependence of export flows, in particular, on psychic distance, is ambiguous. Perhaps the existing models for measuring psychic distance at the country level require changes, a revision of the factors included. Keywords. International trade, export, gravity model, cultural distance, psychic dis-tance, psychic distance stimuli, Four Asian Tigers, Hong Kong, Singapore, Taiwan, Re-public of Korea, regression analysis.

Purpose The purpose of this paper is to focus on consumers’ reactions to cross-border acquisitions (CBA) by exploring the role of consumer perceptions of the psychic distance between the country of the acquirer and that of the target firm when the acquiring corporation has a good or poor reputation. Design/methodology/approach A 2×2 experimental design which manipulated psychic distance and acquirer’s corporate reputation was conducted in Italy. The study considers an Italian food target firm and compares four foreign acquiring firms with different combinations of corporate reputation (good/poor) and psychic distance to Italy (small/large). Findings The authors found that the degree of psychic distance between the countries of the acquiring and targeted firms was inversely related to Italian consumers’ intentions to repurchase the products of the post-acquisition target, and unrelated to the acquirer’s corporate reputation. Originality/value This is the first study focusing on psychic distance in the context of CBA, especially from the perspective of consumer behavior, which can help to better understand certain negative reactions toward the acquisition of a business.

Relationship development has become a critical dimension of international performance for exporters. Differences between markets have been proposed as determinants of relationship development. As a...

This study investigates the role of different dimensions of distance (interorganizational versus intraorganizational, physical versus psychic) on the success of offshore outsourcing of innovation projects. Using fuzzy set qualitative comparative analysis, we identify organizational configurations of spatial, temporal, cultural and linguistic distances that are more likely to lead to successful collaborative outcomes from offshore outsourcing of innovation projects. The findings show that co-location by itself is insufficient to achieve successful offshore outsourcing of innovation but requires, in addition, the presence of high inter-organizational physical distance combined with low intra-organizational psychic distance. Our study highlights the need to jointly consider intra- and inter-organizational distances and both physical and psychic dimensions of distance in offshore outsourcing of innovation.

Cross-national distance among countries has been of central interest in International Business and Management research. Therefore, different efforts have been made to develop models/measurements to address this issue. In this article we identify the models/measurements of cross-national distance developed since the beginning of the 2000 decade. After briefly presenting each model’s distinctive features, we assess their impact on the research field based on a wide range of bibliometric techniques (direct, indirect, and adjusted citation impacts, altmetrics, academic reviews, journals and publishers’ prestige). Our analysis shows that the narrower cultural distance construct has lost ground to the wider psychic distance one. Furthermore, researchers highly value those models and measurement that go beyond the cultural and psychic distance constructs providing a multidimensional framework to analyze and measure cross-national distance among countries. Our analysis of these models’ impact shows that this a salient issue in the research field as a whole and a central topic in the highest ranked journals in International Business and Management.

L’objet de cet article est de mieux comprendre les rôles que jouent les réseaux sociaux numériques (RSN) dans un contexte d’internationalisation pour les petites entreprises (PE). L’étude de cas multiples réalisée entre 2013 et 2014 montre que les RSN contribuent à faciliter l’internationalisation des PE, notamment pour renforcer leurs relations avec leurs partenaires à l’étranger. Les petites entreprises utilisent ces outils pour communiquer à trois « niveaux » (organisationnel, individuel professionnel et privé). Les RSN permettent une approche plus directe des marchés étrangers et, dans certains cas, une accélération du processus d’internationalisation., This article investigates the role of social networking sites (SNS) in the internationalization of small businesses (SE). The multiple case study conducted between 2013 and 2014 shows that SNS support crucial marketing efforts such as the identification of new business opportunities and foster the development of professional and personal relationships with foreign partners. These tools are used by small businesses to communicate at three different levels with their foreign markets (organizational, individual professional and private) and in a cost effective way, saving them resources and allowing them to fasten the internationalisation process., Este artículo tiene por objeto entender mejor los papeles que puedan desempeñar las redes sociales digitales en un contexto de internacionalización para pequeñas y medianas empresas (PYMES). Los estudios de casos múltiples, llevados a cabo entre 2013 y 2014, demuestran que estas redes facilitan la internacionalización de PYMES, entre otros para reforzar los contactos que tienen con sus socios y colaboradores extranjeros. Así, las PYMES utilizan estas herramientas de comunicación en 3 entornos distintos: en la empresa, como individual profesional e individual privado. Por otra parte, como las PYMES suelen disponer de pocos medios financieros, tecnológicos y humanos, las redes sociales les permiten también comunicar con pocos gastos en los mercados extranjeros.

This study investigates individual managers’ formation of psychic distance perceptions to foreign countries. Adopting a social psychological perspective, we propose three social-cognitive mechanisms - social comparison, mere exposure, and social learning - to help explain why and how country- and individual-level characteristics affect the formation of such perceptions. Based on an international survey of 1,591 managers located in 25 countries, we find that country-specific international experience, formal education, and a match between a managers’ first language and the language of the target country reduce psychic distance perceptions. Surprisingly, and in contrast to conventional wisdom, managers’ international and overall work experiences do not seem to have any effect on their distance perceptions. However, relative to country-level factors, individual-level antecedents seem to have rather limited explanatory power as predictors of overall psychic distance perceptions, lending support to the widely-employed practice of operationalizing psychic distances through country level indicators. In addition to these empirical findings, the study contributes by providing a theoretical social psychological framework for the understanding of how psychic distance perceptions are formed.

We expand the conceptualization of psychic distance and use a multilevel framework by studying it as a founder’s psychic distance in the pre-entry phase of entering a specific foreign market, and the SMEs (firm) psychic distance in the post-entry phase of entering that specific foreign market. Based on qualitative research involving six SMEs’ with 18 internationalization events, we found that psychic distance at country and business levels causes difficulties for SMEs in the post-entry phase because of their lack of knowledge. Bridge-makers possessing knowledge about target markets help SMEs to overcome psychic distance challenges. Trust in the relationship with the bridge-maker is an important ingredient to gain knowledge that alleviates the SMEs’ psychic distance challenges. Finally, we go beyond country-business levels of psychic distance by showing that psychic distance also matters at bridge-maker level. This relates to their lack of knowledge about the target market and SMEs’ routines.

PurposeThe study aims to investigate how the collaborative activities of joint action and knowledge-sharing between cross-border buyers and sellers influence the affect-state of buyers and eventually develop their strategic performance under the contingent condition of psychic distance.Design/methodology/approachSurvey data collected from 235 Taiwanese importers were analyzed using partial least squares to test the proposed conceptual framework.FindingsJoint action and knowledge-sharing are found to increase buyer’s engagement and affective commitment. Psychic distance is found to weaken the effect of collaborative activities on engagement and affective commitment. Both engagement and affective commitment are found to increase strategic performance, and the findings confirm their intervening role in the collaborative activities-strategic performance relationship.Originality/valueThe study offers insights into the under researched areas of collaborative activities and strategic performance in international exchanges and highlights the role of psychic distance in the success or failure of relational exchanges in international environments. The study introduces the concept of engagement and advances the theoretical understanding of the concept’s significance and application in international buyer–seller exchanges.

Purpose While previous studies have focused on the role of directors in the formation of transnational interlocks, this paper argues that firm strategy can also influence the development of these relationships. The purpose of this paper is to shed light on the practice of transnational interlocks by extending board interlocks theory from the national to the transnational context, and exploring aspects that are unique to the transnational level. Design/methodology/approach Based on the experiences of four British firms, this paper develops a conceptual framework that integrates under-examined dimensions of this networking practice at the organizational level of analysis, specifically degree of internationalization (DOI) and psychic distance (PD). Findings The paper argues that firms will increasingly engage in transnational interlocks as internationalization intensifies, and that expansion into psychically distant countries may result in further engagement in these connections. Further, firms will tend to form transnational received interlocks at their early stages of internationalization, and transnational sent and neutral interlocks at later stages of this process. It identifies four categories of firms: locals, extenders, explorers and cosmopolitans. Practical implications Directors can contribute to their firms’ success by interlocking with firms located in key foreign markets. Firms should also welcome directors with transnational board appointments to secure knowledge and resources overseas. Originality/value The manuscript contributes to our understanding of transnational interlocks by examining the independent and joint influence of the firm’s DOI and PD on the formation of such relationships.

Cette étude reprend le cadre d’analyse de Prime et al. (2009) pour analyser les dix dernières années de la littérature export (2007-2016) sur la distance psychique de façon à voir si les problèmes soulevés à l’époque ont été résolus. L’étude examine quatre facettes du construit de la distance psychique : sa conceptualisation, son opérationnalisation, sa mesure et son réseau nomologique. Les problèmes rencontrés dans la littérature sont analysés et des solutions sont proposées. Enfin, la métaphore de la friction est présentée comme une alternative à la métaphore de la distance pour appréhender l’extranéité (foreignness, dans la littérature anglophone) dans les études sur les relations export et plus généralement en management international., We use the framework set by Prime et al. (2009) to analyze the export studies published between 2007 and 2016 that deal with psychic distance. The review examines four facets of the psychic distance construct: conceptualization, operationalization, measurement and nomological network. We analyze the problems encountered in the reviewed studies and propose appropriate solutions. Finally, we present the friction metaphor as an alternative to the distance metaphor to assess foreignness in export research as well as in international management., Esta revisión utiliza el marco de análisis de Prime et al. (2009) para examinar la literatura de los diez últimos años (2007-2016) sobre la distancia psíquica en las relaciones exportadores-importadores con el objetivo de averiguar si los problemas detectados entonces fueron resueltos. Investigamos cuatro aspectos de la distancia psíquica: su conceptualización, su operacionalización, su medición y su red nomológica. Analizamos los problemas detectados en la literatura examinada y proponemos soluciones adecuadas. Presentamos la metáfora de la fricción como una solución alternativa a la metáfora de la distancia para comprender la situación creada por el hecho de ser extranjero (foreignness, en la literatura anglófona) en los estudios sobre las relaciones entre exportadores e importadores, así como en los estudios de gestión internacional.

Although value creation is the overarching goal of interfirm exchange relationships, there is little research on relationship value in business markets in general and in global business markets in particular. The current research draws on the theoretical perspectives of dynamic capabilities, relational contracting, industry structure view, and Uppsala model of internationalization and synthesizes their insights to develop a model of customer-perceived relationship value in importer-exporter relationships. A mail survey was used to collect data from 211 import distributors of industrial products. The study results indicate that exporter core offering and customer responsiveness capabilities, importer market-sensing and customer relationship management capabilities, relational governance, psychic distance, and environmental munificence are important determinants of relationship value, while contractual governance has no detectable effect. Theoretical and managerial implications of the findings are discussed and future research directions are presented.

As trade barriers fell, South African enterprises faced new competition in their previously protected home market. With established markets becoming saturated, multinational enterprises (MNEs) steered towards emerging markets abroad. Geographically, South Africa is an intrinsic part of Africa, and psychic distance, defined as consisting of, interalia, differences in language, culture and business practices, can disturb the flow of business between an enterprise and the world. Physical proximity to countries makes it easier for enterprises to understand the culture and business practices, and reduces the uncertainty and risk of the new market. Perceived distance into Africa and elsewhere is also influenced by the specific consumer attributes and behaviours. Enterprises perform best inforeign markets where consumer behaviour is most receptive to a company’s goods and services. The study empirically investigated perceptions of psychic distance and foreign consumer factors in FDI decision making by senior executives of South African MNEs. The findings suggest that psychic distance is relatively unimportant and foreign consumer factors relatively important in FDI decision making.Key words: Psychic distance, consumers, executive biographical factors, South African MNEs, senior executive perceptions

PurposeThis paper aims to explore the internationalisation of service-sector small- and medium-sized enterprises (SMEs) from an emerging market, focussing on the entry modes, psychic distance, business network, internationalisation challenges and capabilities of business training and consultancy firms from Malaysia.Design/methodology/approachA multiple-case study approach is adopted, and 31 in-depth interviews were conducted with the top management and executives from eight business training and consultation (BT&C) firms in Malaysia. The Uppsala model is used for theoretical guidance to analyse the internationalisation of the firms.FindingsThe results suggest that psychic distance, business network and business capabilities influence the internationalisation of BT&C firms from Malaysia. However, the discussion of entry modes in the framework of service internationalisation does not accurately explain the internationalisation of the studied firms.Research limitations/implicationsThis study is a qualitative research based on the experiences of eight firms. The basis of this study is inadequate for scientific generalisation. Quantitative research should be conducted in the future to provide a statistical test and empirical results. This study is concerned with the emerging-market context. The study could be expanded to include more industries and other emerging markets in the future.Practical implicationsThis study explored the application of internationalisation theories to the BT&C industry in an emerging market, with particular emphasis on firms’ entry modes, psychic distance, business networks, international challenges and capabilities. This study also highlighted some of the key internationalisation challenges facing emerging market small- and medium-sized enterprises (EMSMEs), underlining the importance of business networks and capabilities.Social implicationsNevertheless, this study shares useful and practical discoveries concerning the internationalisation process of BT&C firms from the emerging market, focussing on entry modes, psychic distance, business network, the challenges faced and the required capabilities.Originality/valueThe study provides new insights into service internationalisation in SMEs from an emerging market. The application of internationalisation theories to the BT&C industry in an emerging market is analysed.

The internationalization of SMEs is generally characterized by a progressive multi-stage process, in which organizations gradually acquire knowledge and skills that strengthen their commitment to the outside world. International experience – a form of autonomous accumulation of know-how that allows the understanding of potential markets – influences the decision-making process for selecting export markets. Although gradual acquisition of international experience allows an increase in export activity in more physically distant markets, this gradualist postulate does not have an indefinite validity. This paper analyzes the limits of this international experience in terms of psychic distance, examining whether those SMEs that have obtained enough international experience to develop markets of greater complexity tend to select more complex, i.e., more psychically distant, countries. The findings generally support the idea that the relationship between international experience and psychically distant markets ceases when SMEs have obtained enough international experience, after which it is the objectives of a strictly business nature which condition the decision to select potential markets. For these reasons, when the organization has obtained enough skills and international experience to develop markets of greater complexity, the managers choose to select more complex i.e., more psychically distant, countries., La internacionalización de la PYME se caracteriza generalmente por un proceso progresivo de varias etapas, mediante el cual las organizaciones adquieren gradualmente conocimientos y habilidades que refuerzan su compromiso con el exterior. La experiencia internacional -una forma de acumulación autónoma de know-how que permite comprender los mercados potenciales- influye en el proceso de toma de decisiones para seleccionar los mercados de exportación. Aunque la adquisición gradual de experiencia internacional permite aumentar la actividad exportadora en mercados físicamente más distantes, este postulado gradualista no tiene una validez indefinida en el tiempo. Este trabajo analiza los límites de esta experiencia internacional en términos de distancia psíquica, examinando si aquellas PYMEs que han obtenido suficiente experiencia internacional para desarrollar mercados de mayor complejidad tienden a seleccionar países más complejos, es decir, más distantes psíquicamente. Los resultados apoyan en general la idea de que, la relación entre la experiencia internacional y los mercados psíquicamente distantes cesa cuando las PYMEs han obtenido suficiente experiencia internacional, tras lo cual, son los objetivos de carácter estrictamente empresarial los que condicionan la decisión de seleccionar los mercados potenciales. Por estas razones, cuando la organización ha obtenido suficientes competencias y experiencia internacional para desarrollar mercados de mayor complejidad, los directivos optan por seleccionar países más complejos, es decir, más alejados psíquicamente.

Our understanding of how managers take international location decisions is still scarce. Building on the microfoundations view, we explore managers’ perceptions of risk and return in a discrete choice experiment with 2,618 decisions in 2013 (a globalizing world) and 2017 (a de‐globalizing world). While managerial perceptions vary over time due to economic and political changes, such as the current de‐globalization trend, decision heuristics remain remarkably stable: locations perceived as least risky offer the highest expected returns. We also find that distance is a good proxy for managerial perceptions. Investigating the microfoundations of decision‐making we show that international experience, risk‐taking propensity and shareholder status affect heuristics. In sum, our study provides novel insights into the microfoundations of location decisions and extends the behavioral perspective on internationalization.

The purpose of this study is to broaden our understanding of the post-entry effects of psychic distance by asking what markets - psychically close or distant - became over time the most strategically significant for European SMEs. Specifically, we analyse whether psychic distance is a valid predictor of the strategic significance of foreign market, as well as whether and how this relationship is moderated by export diversification. Contrary to expectations, the study findings reveal that psychic distance to the foreign market actually increases its post-entry strategic significance, providing support for the phenomenon of PD paradox.

The impact of psychic distance stimuli and inter-partner fit on the performance of international joint ventures (IJVs) has not been adequately explored in the case of emerging economies. Another lacuna in literature is the analysis of the performance of IJVs in regard to the new normal business landscape. This study analyses the impact of psychic distances stimuli and inter-partner fit on the performance of IJVs in the context of new normal business landscape. The secondary data of 122 IJVs headquartered in India with G7 nations is empirically tested. The study indicates that out of all psychic distances, administrative and economic distances significantly affect the performance of IJVs.

This paper aims at conducting an explorative study to investigate three research questions: 1) whether culture in cross-cultural business context still matters, 2) why it matters, and 3) how we can deal with cultural differences. Drawing upon theories of international business, social/cultural psychology and the contributions of positive psychology, this study in the context of Sino-European FDI provides a more integrative and constructive view of culture (cultural differences) as an evergreen phenomenon in international business. Extant literature contains numerous studies about culture, mostly from the perspective of countries and organizations. We fill the void in our study by focusing on the individual level and explore the perceptions of culture of European managers investing in China. Our sample consists of managers representing their European companies investing in China. Managers’ perceptions were inquired along 12 dimensions within the psychic distance model, elaborated and operationalized by international business scholars. Managers agreed on replying to a series of questions under the form of an interview, including Likert scale questions, reflecting their perceptions along each psychic distance dimension, including culture. Main findings show that culture is perceived as the most relevant dimension in Sino-European contexts. This paper contributes to the literature on cultural impact in international business settings by focusing on the individual’s subjective perceptions. This study highlights how intergroup relations between European and Chinese managers coming from different cultural background are challenging, while the diversity and perceived differences also provide opportunities.

This article sheds light on an incidental discovery of hypothesis testing error and its solution in a study that compared the multimodel effects of information and knowledge on career decisions. Using a sample of 500 second and third year undergraduates who were simple randomly recruited from 10 simple randomly selected universities, the study demonstrates how hypothesis testing error could occur when multimodel comparison of the effects of the same set of independent constructs (information and knowledge) on a different but related set of dependent constructs (career pursuit and rewarding career pursuit) is performed and how that error can be avoided through detailed scrutiny of the psychic distance between the dependent constructs. It is hoped that the insights herein will be useful for scholars to avoid and overcome the pitfall of hypothesis testing error arising from multimodel comparison involving a different but related set of dependent constructs.

When multinational corporations face foreign marketing crises, the psychic distance between the home and host country represents a distinct challenge. This paper examines the curvilinear relationship between psychic distance and firm performance during marketing crises, and the moderating role of marketing capabilities. We test our hypotheses using an event study on a panel dataset of 217 firms based in 19 countries facing crises in 41 host countries. The results show that (1) marketing crises are most harmful when the host country is either very close or far away and (2) firms can mitigate this effect with marketing capabilities.

This study applied psychic distance concept to the internationalization of healthcare service. The findings found that the psychic distances perceived by Japanese elderly and Thai caregivers toward...

Value creation is the raison d'etre of a business relationship. Yet a relatively small number of studies investigate the role of relationship value in interfirm relationships in general and in cross-border business relationships in particular. This work synthesizes and extends existing research to present a conceptual model that identifies the key antecedents and outcomes of relationship value in international channel relationships. The study uses both a correlational (partial least squares-structural equation modeling) and a configurational (fuzzy-set qualitative comparative analysis) approach to test the model relationships. Comparing the findings of both approaches provides insights into the asymmetric versus symmetric relationships among the observations. The study results reveal the important roles of psychic distance, relational norms, and relationship learning in relationship value creation and the implications of relationship value in terms of relationship quality and performance.

We examined how psychic distance moderates the association of South Korean chief executive officers’ (CEOs’) knowledge and quality management with their predisposition to invest in African technology and innovation markets. Participants were current and prospective South Korean African business investment senior managers (n = 64; 20 females; mean years in management = 19.4) or not (n = 187; 97 females, mean years in management = 15.9). Hierarchical regression analysis was used to analyse the relationships. Only quality management was significantly related to technology commercialisation capabilities and innovation performance among managers with African investment experience. However, both quality and knowledge management were significantly related to the outcomes among managers without African investment experience. The effect of psychic distance might be explained by risk averseness, in that those without experience of African investment might be with more risk avoidant than those with such experience.

Research Summary: With respect to entry mode decisions, psychic distance may play two contradictory roles. On one hand, the transaction cost perspective is concerned with opportunism. Psychic distance magnifies the threat of opportunism, which encourages higher levels of control by foreign firms. Conversely, the new internalization perspective emphasizes the role of complementary assets controlled by local entities. Distance increases the need to access local knowledge, which encourages firms to seek joint ventures. By adopting an experimental approach and measuring managers' a priori perceptions of distance, this article contributes to the literature by providing a more sophisticated approach for discriminating between these effects. The results indicate that distance magnifies the need for firms to access complementary assets; however, distance does not appear to magnify the threat of opportunism. Managerial Summary: This article explores the role that psychic distance (i.e., differences across countries in culture, language, religion, etc.) plays in how firms enter foreign markets. Specifically, do they prefer wholly owned subsidiaries (WOS) or do they prefer to form joint ventures (JV) with local players? One perspective argues that firms are concerned about potential partners in a foreign market taking advantage of them; thus, they will prefer the greater control a WOS offers. Conversely, firms may simply recognize that these differences put them at a disadvantage and prefer a JV as a way to gain local knowledge. Our experiments indicate that the latter explanation dominates. When entering very different countries, managers seem to prefer JVs in order to access key local knowledge.

The objective of the article is to investigate the factors that influence the choice of the destination of Brazilian Foreign Direct Investment (FDI). We analyse especially if the decision regarding the locality is influenced by psychic distance. This article contributes to literature, firstly, by investigating the investment decisions of Brazilian companies from the theoretical perspective of psychic distance. Secondly, as Brazil is a country considered to have an emerging economy, it allows us to observe whether the results found in economies considered developed are repeated in developing localities. We tested by linear regression the influence of differences in religion, language, industrial development, education, democratic level and political ideology, on the destination of Brazilian FDI. The results point to economic return as a determining factor in the internationalization process of Brazilian companies. Contrary to the theory of psychic distance, the most distant countries received the largest share of Brazilian multinational investments.

Psychic distance, now established as an individual perceptual construct, is so far a partial explanation of internationalization processes of entrepreneurial firms. Opportunity in foreign markets, although considered important, has hitherto been an assumption rather than explored as an explanatory factor in internationalization theories. Through qualitative data from technology entrepreneurs from New Zealand this study considers opportunity, like psychic distance, as an individual perceptual construct and posits that a combination of opportunity and psychic distance perceptions better explains entrepreneurial internationalization action/intention decisions. The explicit combination proposed is “opportunity-distance quotient” and signifies a shift from psychic distance obstacles based explanations to an opportunity-psychic distance interaction based exploration of entrepreneurial internationalization. Limitations of the study and further research are discussed.

The contribution of foreign tourist consumption on national economies is becoming increasingly important for many countries. This study examines the relationship of home-host country psychic distance (HHCPD), tourism shopping motivation and attitudes towards local and global fashion brands in host countries. Survey data from a sample of 500 Chinese tourists were collected at an international airport in Korea. The results reveal that all three key factors of HHCPD (economic, geographic and cultural distance) positively affect social shopping motivation. Moreover, only economic distance has a positive effect on commodity shopping motivation, while both cultural and economic distance positively influence souvenir shopping motivation. All three factors of tourism shopping motivation positively affect local fashion brand attitudes, while only commodity shopping motivation positively affects consumer attitudes towards global fashion brands. Thus, fashion marketers should trigger the shopping motivation of foreign tourists by maximising the psychic distance from their home in order to satisfy fashion-seeking tourists.

The development of information technology projects is no longer limited to the domestic sphere. This study identifies the differentiation of risk categories between global and domestic projects through an exploratory research carried out by means of a systematic literature review. 1367 risks were identified in 37 articles and classified within 22 categories. The major concern regarded in domestic project management was the client (external risk) and scope (internal risk) and, in global project management, the psychic distance (external) and coordination and control (internal). The main difference between the risk categories for each project type refers to the psychic distance category, which was identified almost exclusively in global projects, thus making the external risks more relevant than those in domestic projects. On the other hand, it makes risks such as client, supplier and stakeholders be underestimated. The results indicate that project managers should focus on different risks depending on the type of IT project: global or domestic.

In light of the currently limited understanding of the role of cultural issues that may hamper firm success in cross-border activities, particularly in the context of Central and Eastern European (CEE) countries, the purpose of this paper is to examine how export managers experience and perceive cross-national differences, frequently referred to as ‘psychic’ or ‘cultural distance’ in the literature. We offer empirical insights from a small and open CEE country, in which exports are recognized as a driving force for economic growth. We conducted a series of systematic in-depth interviews on the sample of Slovenian exporting companies of different sizes, industries, and experiences in cross-border activities. Based on a grounded theory approach, we identified three sets of factors underlying psychic distance and their six related components from the exporters’ perspective: cultural differences and the language (i.e., patterns of thinking, behaviours, language), perceived differences in relational business practices (i.e., relationships with business people, business practices), and differences in the macro environment.

The purpose of this paper is to assess how the transfer of explicit and tacit knowledge is affected by the knowledge disseminative capacity of a foreign parent firm, with an emphasis on the moderat...

Marketing adaptation strategy has been characterized as a strategic imperative in markets with protectionist and nationalist sentiments, which underscores the need to better understand the effects of adaptation strategy. However, empirical investigations of international marketing strategy have considered mandatory and discretionary adaptations as equivalent. Discretionary adaptations, unlike mandatory adaptations, involve choice; thus, they are more relevant to the selection of an international marketing strategy. This article focuses on the direct and conditional effects of discretionary adaptation on export performance. Analyzing data from 203 U.S. small and medium-sized enterprises, the authors find a positive effect of discretionary adaptation on export performance as well as moderating effects of (1) a market characteristic (psychic distance), (2) a firm characteristic (international experience), and (3) a product characteristic (product positional advantage). The implications suggest that adaptation strategy may be more advantageous than previously thought, and that researchers should focus on discretionary adaptations when investigating the choice of a relatively standardized versus adapted international marketing strategy.

Purpose The purpose of this paper is to propose a “parachuting internationalization” metaphor as an alternative strategy that firms may choose to enter foreign markets compared to Uppsala Model and Born Global Model. This proposed new metaphor seeks to integrate the Uppsala and the Born Global Models to show that firms can attain success in the age of globalization if they are adept at devising creative strategies that help them overcome the challenges in a psychically distant environment. Design/methodology/approach This is a research paper that develops theoretical perspectives inspired by the Yin Yang thinking as well as the “thick descriptive” multiple case studies. Findings “Parachuting internationalization” embraces essential elements of the Born Global and the Uppsala Models and refers to a firm’s strategic targeting of markets with great potentials, correct positioning, swift actions, and fast learning, thus enabling the firm to circumvent the conventional wisdom of liability of foreignness, cultural distance, and psychic distance. “Parachuting internationalization” is essentially a GLOCAL approach which can be implemented in practice in terms of global vision, location, opportunity, capital, accelerated cultural learning and quick action, and logistics. Research limitations/implications The “parachuting internationalization” metaphor is derived from interviews with four Scandinavian firms’ experiences that have entered into the Chinese market. This research reveals that two seemingly opposite approaches, i.e., the Born Global and the Uppsala Models, can be fruitfully combined and reconciled to generate a third novel approach. Originality/value To date, there has been little attempt to reconcile and/or integrate the Born Global and the Uppsala Models of internationalization. The paper enriches the ongoing debate on the internationalization of firms in the international business literature that has relied primarily on the Uppsala Model or Born Global Model. The study shows that a third way, i.e. the “parachuting internationalization” is both theoretically innovative and practically feasible.

A classic model of international entries—the Uppsala model—postulated that firms enter foreign countries in increasing order of psychic distance between the home and the host country to minimize the risk of failure. A question that was left unanswered was whether this sequence of entry results in any performance benefits. Literature on the impact of psychic distance, or its components like culture distance, on the performance of foreign operations abounds but the order of entry that is critical to the Uppsala model remains conspicuously absent. This paper presents an analysis of foreign country entries and exits by the U.S. multinationals in the manufacturing and service sectors since 1965. Companies that enter foreign countries in increasing order of culture distance do gain a significant performance advantage over those who do not. Changes over time and across industry sectors are discussed.

The emergence and quick rise of online shops has dramatically changed the retail industry over the last decade (Gartner Industry Research 2012). E‐commerce already accounts for 2.45 % (EUR 423 bn) of European GDP (E‐Commerce Europe 2015). At the same time, internationalization of retailers is an ongoing trend.

Internet platforms are increasingly enabling individuals to access and interact with a wider, globally dispersed group of peers. The promise of these platforms is that the geographic distance is no longer a barrier to forming network ties. However, whether these platforms truly alleviate the influence of geographic distance remains unexplored. In this study, we examine the role of geographic distance with machine learning approach using a unique dataset of the network ties between traders in an online social trading platform. Specifically, we determine the extent to which, compared to other types of distances, geographic distance predicts the occurrences of the network ties in country dyads. Using cluster analysis and predictive modelling, we show that not only the geographic distance and network ties exhibit an inverse association but also that geographic distance is the strongest predictor of such ties.