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Purpose: This paper presents a comprehensive and integrated review of the literature on the role of psychic distance in shaping inter-organizational relationships, by uncovering the theoretical, methodological, and thematic foundations of this research domain. Design/methodology/approach: Leveraging a systematic literature review in combination of text mining techniques using Leximancer, the study identified 62 relevant articles published between 1980 and 2024. The analysis revealed four key areas of focus: (1) interfirm business relationships, (2) relational governance and performance, (3) relationship quality, and (4) relationship violation. Findings: The findings indicate that this body of research is grounded in well-established theoretical frameworks, with social exchange theory, transaction cost analysis, relational exchange theory, and the resource-based view being the most frequently employed. The literature predominantly emphasizes the role of psychic distance in the formation and maintenance of interfirm business relationships, while the other three areas remain comparatively underexplored. Originality/value: By offering a more robust framework and a holistic understanding of psychic distance in inter-organizational relationships context, this study paves the way for further theory-driven studies, which is a theoretical contribution towards advancing this research area [ABSTRACT FROM AUTHOR]

Banking is one of the highly regulated industries, where a single set of global standards is likely to play a significant role in eliminating double reporting and reducing information asymmetry. Accordingly, we use data on 98 countries over 9 years to examine whether the use of International Financial Reporting Standard (IFRS) drives bank internationalisation. The results show that the use of IFRS is positively and significantly associated with an increase in foreign investment in the banking sector by easing regulatory compliance. However, in developing countries, the benefit of IFRS increasing foreign investment banks is associated with both easing regulatory compliance and reducing information asymmetry between banks and their clients. Our results are consistent across different sub‐samplings, including EU versus non‐EU, high versus low absence, and divergence between domestic standard and IFRS. These results provide reassurance and clear evidence of how IFRS facilitates the global flow of capital, even in a highly regulated industry such as banks. The results are robust to alternative measurements of variables and endogeneity tests using the Two‐Stage Least Square, Two‐step System Generalised Method of Moments and Propensity Score Matching. [ABSTRACT FROM AUTHOR]

Purpose: Building on recent developments in the Uppsala model, we first examine the role of business model innovation (BMI) in the internationalization process of firms and then determine to what extent international experience and psychic distance have a moderating effect between BMI and the success of a firm's international initiatives. Design/methodology/approach: We apply a multiple hierarchical regression model to a sample of 168 firms of two border regions in Italy (Friuli Venezia Giulia) and Austria (Carinthia). Findings: We find empirical support for the moderating role of both psychic distance and international experience in the relationship between business model innovation and the success of internationalization initiatives. Originality/value: The paper contributes to the evolutionary perspective of the internationalization process of firms by adding new aspects related to the role of business model innovation to the most re-cent developments of the Uppsala model. From an empirical point of view, the paper contributes to the literature by identifying and testing two boundary conditions that shape the relationship between BMI and international success. [ABSTRACT FROM AUTHOR]

We study the investment behavior of new domestic Chinese venture capital (VC) firms compared to foreign VC firms newly entering the Chinese market. Given the institutional and cultural differences or psychic distance between China and the home country of foreign VC's, the Uppsala Model would predict that foreign VC's will be more cautious initially than domestic Chinese VC's and that the degree of caution will increase with the psychic distance. Our data comes primarily from Zero2IPO, which has a nearly exhaustive list of VC investments in China from 1996 to 2006. We also use country-of-origin, membership in GLOBE cultural clusters, and a broad measure of psychic distance based on institutional and cultural differences from Berry, Guillén, & Zhou (2010) and the Freedom Index to test this prediction. We find support for the hypothesis that psychic distance affects initial investment behavior. [ABSTRACT FROM AUTHOR]

This research evaluates the liability of foreignness (LOF) in metals and mining companies in Brazil by comparing the financial performance of foreign and local firms. The study also tests if the increase in the psychic distance index (PDI) reduces the performance of foreign companies. We estimated panel data regression models for a sample of 78 companies (29 multinationals in Brazil). Even though the performance differences between mining foreign companies and local ones are not significant, there is evidence that foreign firms face LOF and we confirmed a negative relationship between PDI and the performance of foreign metals and mining companies. [ABSTRACT FROM AUTHOR]

Purpose: The Uppsala internationalization model is one of the widely accepted models for the development of exports. This model suggests that the explanation of relations between psychic distance, its antecedents and marketing mix adaptation would lead to successful export practices. Consequently, this study aims to determine the determinants of export performance, antecedents of psychic distance and marketing mix adaptation. Design/methodology/approach: This study uses a mixed-methods research design in which qualitative and quantitative research methods were used together. The face-to-face interview method was used to identify the psychic distance antecedents. The face-to-face interview was with eight Turkish exporting firms. Based on the data obtained from face-to-face interviews, a scale for measuring the antecedents of psychic distance has been developed and used in the quantitative study. The scales used for measuring marketing mix adaptation, export performance and psychic distance perception, which has both individual and country dimensions, were adapted from the literature. Data were collected from 221 Turkish exporting companies for quantitative research. Structural equation modeling was used to test relationships between the variables. Findings: As a result of the data analysis of face-to-face interviews, six antecedents of psychic distance were determined. According to the subsequent quantitative research results, it has been determined that employee expertise, which is one of the antecedents of psychic distance, only affects the country dimension of psychic distance perception; the cooperation, institutionalization and international market experience affect both the country and individual dimensions of psychic distance perception. The country and individual dimensions of psychic distance were found to have an impact on the product, price, promotion and distribution dimensions of marketing mix adaptation. Only the product dimension of marketing mix adaption was found to affect export performance. Practical implications: This study offers a comprehensive perspective for both theoretical and practical studies by discussing various aspects that would help improve the exporting activities of firms within the scope of antecedents of perceived psychic distance. Originality/value: In this research, a scale was developed for measuring the antecedents of psychic distance, and the variables affecting export performance were analyzed holistically. [ABSTRACT FROM AUTHOR]

Objective: This study focuses on the internationalization process of an important emerging markets multinational (EMM), aiming to understand how such companies manage to achieve relevant positions in the global economy. In seeking to understand its strategy and internationalization process, we tackle the debate on whether traditional behavioral international business theories are adequate to explain EMM internationalization processes. Method: An in-depth case study was performed with one of the largest global players in the beauty industry, Natura & Co. The case study method was selected given that an in-depth data collection involving multiple sources of information was needed to investigate the phenomenon. Primary and secondary data were collected, analyzed, and triangulated. Main Results: This study brings the construct of organizational psychic distance to the discussion and how can it impact internationalization choices. Moreover, it illustrates how some EMMs are successfully applying concepts described by both traditional and EMM theories in their internationalization strategies Relevance / Originality: The study illustrates an empirical case from Latin America, a region poorly explored academically. Additionally, the case explains how a Brazilian company has managed to compete globally and become one of the biggest global players in the beauty industry. Theoretical / Methodological Contributions: The case discusses, for the first time, the construct of organizational psychic distance and its impact on internationalization choices. It also defies the boundaries of the existing theories and enriches the literature by portraying the springboard perspective as complementary to the Uppsala model so that both theories can dialogue and be extended. [ABSTRACT FROM AUTHOR]

This study draws on theory of dyadic morality and categorization to disentangle opportunistic behaviors from the perception by their victim that leads to the moral categorization of the perpetrator as an opportunist. We show that it is this moral categorization, not the behaviors, that determines the trust beliefs of the victim. Further, the effect of psychic distance on the process of perpetrator moral categorization as an opportunist depends on the form of opportunistic behaviors. Finally, this study questions the cultural universality of opportunism by showing that effects of opportunistic behaviors on categorization vary across national cultures—based on data sets of French and Slovene exporters. [ABSTRACT FROM AUTHOR]

Inspired by an essay by Martin Buber (1950), and then by the work of Ernest Schachtel (1959) on the idea of "embeddedness" and emergence from it, this essay is an account of the role of "distance" or "separateness" in clinical psychoanalytic work. We tend to assume that the capacity to appreciate otherness is always already present. We often lose track of the necessity to "set the other at a distance" (Buber), the prerequisite for emergence from embeddedness in the other. The entire process—i.e., setting the other at a distance and then emerging from embeddedness in the other—must take place over and over again in any treatment, and in both directions: patients must disembed from analysts, but it is just as necessary for analysts to disembed from patients. It is the emergence from embeddedness that allows the analyst's appreciation of the patient's otherness. Embeddedness in the other is discussed as mutual enactment. This use of these phenomena in treatment is articulated in the theory of witnessing presented elsewhere in recent years (Stern 2009, 2012, 2022b, in press). A detailed clinical illustration is presented. [ABSTRACT FROM AUTHOR]

Copyright of Revista Facultad de Ciencias Economicas: Investigacion y Reflexion is the property of Revista Facultad de Ciencias Economicas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We investigate how formal institutional distance (FID) moderates the cultural distance (CD) and financial performance relationships of foreign subsidiaries of firms. Following recent research, we estimate the asymmetric effects of CD by considering its size and direction towards host countries on the opposite poles of each cultural dimension's scale. We propose that a limited understanding of the formal institutions in the host country, as measured by the magnitude and direction of the FID, can positively moderate the CD–performance relationship. This is mainly because foreign subsidiary firms may be more reliant on their capacity to navigate the less formal (and more implicit) aspects of the host country's institutional environment, such as their ability to cope with the CD. We use foreign subsidiary data from the Orbis database, which includes 22 developed and 22 developing home countries and over 1400 foreign subsidiaries operating in 10 of Latin America's largest economies (host countries) from 2012 to 2015 (a period of 3 years). Findings confirm the asymmetric effects of CD; however, by considering the direction of FID, our findings reveal that the more FID is directed towards host countries that are less developed, the more significant the effects of CD on financial performance. These findings contribute to our knowledge of how formal and informal institutional distances interact by showing that the greater the FID towards less developed host countries, the more pronounced the effects of CD. [ABSTRACT FROM AUTHOR]

Classical evolutionary theory prescribes following a step-by-step process of internationalization, but in practice, companies often ignore the significant psychic distance to the target market and quickly enter culturally distant markets. The article studies how small enterprises of Primorsky krai (Russia) choose a foreign market to enter and identifies the factors enabling entrepreneurs to deal with high uncertainty and overlook cross-national differences when making their choice. The research methodology includes internationalization theory, a non-systemic approach to choosing an international market, the concept of psychic distance, as well as the developments of behavioural economics and psychology. The methods of verbal protocols and interviews were applied. The primary data of 50 protocols were coded and processed through content analysis. The study describes the process of choosing a foreign market considering entrepreneurs’ cognitive limitations. During this process, entrepreneurs are guided by opportunities available abroad rather than the risk level. In their decision-making, entrepreneurs rely on the availability heuristic, anchoring and adjustment heuristic, as well as the feeling of knowing. Entrepreneurs’ overconfidence leads to hasty decisions based on cognitive limitations. The data explain the reasons behind the accelerated internationalization of small enterprises in Primorsky krai. The work attempts to involve the entrepreneur in a more thorough initial assessment of the foreign market. Increasing the number of cases under review, conducting longitudinal studies, and deeper analysis of the factors that form the entrepreneur’s perception of foreign markets could become a further progression of the present study.

De‐internationalization is a novel phenomenon that is gaining significant attention because of its proliferation in international business. However, unlike internationalization, literature on de‐internationalization remains opaque and scarce, whereby the acts that characterize de‐internationalization and the characters of those acts have remain largely underexplored. To address this knowledge gap and contribute to the body of knowledge on international business, this article aims to shed light on the acts and characters of acts defining de‐internationalization. To do so, this article adopts a taxonomic method to conceptual development. In doing so, this article explains that (1) the act of de‐internationalization can manifest as a firm's decision to adapt and stay or withdraw and exit an international market (what is happening), which can occur through (2) decoupling or psychic distance (how it is happening) due to (3) a means‐ends or a needs‐ends reason (why it is happening), respectively. Taken collectively, this article makes a seminal contribution by establishing a general theory of de‐internationalization. [ABSTRACT FROM AUTHOR]

Our study aims to narrow the existing gap in the academic literature on cultural determinants of stock market liquidity by addressing the problem through a completely new lens - that of the international investor's point of view. To do this, we resort to bringing together the financial and psychological concepts and use a proxy that can measure the perception an individual investor has upon the di¤erences between his/her home country and other countries. The motivation behind this decision is as follows: despite there being a vast majority of studies analyzing the cross-country cultural distance e¤ects upon the stock market liquidity, they only resume to describing those e¤ects through the perspective of the domestic investor. We decided to go one step further and employ a proxy to capture the e¤ects of the di¤erence between the home country and the target country upon an investor's decisions to trade internationally, which in turn, can a¤ect the overall liquidity of the stock market in the target country. This proxy is called "psychic distance stimuli" and was first measured and used by Douglas Dow. We performed the analysis on a rather extensive sample of 21 developed and 24 developing countries, spanning an interval of 22 years, beginning in 1996. The results confirm our hypothesis that the measure of psychic distance plays a significant role in explaining the liquidity of the stock market in the target country. [ABSTRACT FROM AUTHOR]

Objective: The objective of the article is to fill a research gap regarding the impact of psychic distance on the initiation of relationships by managers from Poland-based firms and to analyze the psychic distance’s influence on firm performance.

Purpose – The 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/approach – This 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. Findings – The 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/value – Currently, 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.

The present paper investigates the effect of religious distance on the choice of location of Moroccan Multinational Enterprises (MNEs) when investing abroad. The main research hypothesis considers the religion as an element of the psychic distance between the home country and host countries that can affect the FDI location decision. The results of the Robust Weighted Least Squares (RWLS) estimation method using panel data of outward FDI flows from Morocco to 54 host countries from 2007 to 2020 show that the more the local Muslim population is important in the host country, the more it receives FDI from Morocco. The results of the study are highly relevant to policymakers as they prove that the religion is important for inward and outward foreign direct investment. On the one hand, policy makers in charge of FDI attractiveness in the host country have to adopt religious strategies accompanied by public–private partnerships to integrate main foreign religions to facilitate the integration of MNEs and reduce their transaction costs. On the other hand, policy makers in charge of promoting outward FDI from the home country have to establish a liaison office in host countries to support the MNEs and facilitate their internationalization process.

The present paper investigates the effect of religious distance on the choice of location of Moroccan Multinational Enterprises (MNEs) when investing abroad. The main research hypothesis considers the religion as an element of the psychic distance between the home country and host countries that can affect the FDI location decision. The results of the Robust Weighted Least Squares (RWLS) estimation method using panel data of outward FDI flows from Morocco to 54 host countries from 2007 to 2020 show that the more the local Muslim population is important in the host country, the more it receives FDI from Morocco. The results of the study are highly relevant to policymakers as they prove that the religion is important for inward and outward foreign direct investment. On the one hand, policy makers in charge of FDI attractiveness in the host country have to adopt religious strategies accompanied by public-private partnerships to integrate main foreign religions to facilitate the integration of MNEs and reduce their transaction costs. On the other hand, policy makers in charge of promoting outward FDI from the home country have to establish a liaison office in host countries to support the MNEs and facilitate their internationalization process. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Consumer & Consumption Research / Tüketici ve Tüketim Araştırmaları Dergisi is the property of Beta Basim Yayin Dagitim and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Management international / International Management / Gestiòn Internacional is the property of Management International and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Conflicting evidence on the issue of psychic distance (PD) in international business relationships has suggested the existence of misunderstood boundary conditions to its effect. This article argues that country image (CI) is a contingent factor to the effect of PD. Expectancy-value theory provides the theoretical foundations, and structural equation modeling analyses for a sample of 358 exporter-importer relationships in the global wine industry provide empirical support for this argument. Product-related CI mitigates the negative impact of PDon the relational exchange orientation (REO) between firms. Specifically, a high level of PD dampens REO when product-related CI is poor, whereas a strong product-related CI helps firms facing such PD conditions to build REO. People-related CI has an indirect effect on REO through product-related CI. This study helps explain the "paradox of distance" and offers a fresh perspective on how to handle the issue of PD when relevant. [ABSTRACT FROM AUTHOR]

Although collaborative business arrangements based on relationship marketing have become ubiquitous over the past decades, research studies of relationship value in international marketing channels are scarce. Drawing on the relational view of competitive advantage, this study investigates the drivers of relationship value in exporter-importer relationships and its impact on customer loyalty. The study findings reveal that relationship-specific investments, knowledge sharing, complementary capabilities, and relational norms are powerful contributors of importer-perceived value in an overseas supplier relationship. Importantly, exporter cultural sensitivity weakens the negative effect of psychic distance on relationship value; when cultural sensitivity is low, psychic distance takes on greater importance in attenuating relationship value, whereas when cultural sensitivity is high, psychic distance has no discernible effect. In addition, the results demonstrate that relationship value results in insensitivity to competitive offerings and future purchase expansion. The article concludes with a discussion of implications for international marketing theory and practice. [ABSTRACT FROM AUTHOR]

Previous studies have consistently observed that international visitors are more satisfied with the tourism experience than their domestic counterparts. To date, however, no study has provided empirical evidence of the mechanism that could explain this phenomenon. Building on the experiential paradigm, we conducted two empirical studies (a field study and an online experiment) showing that the reason foreign (vs. domestic) visitors exhibit higher levels of satisfaction lies in the greater hedonic value that these tourists derive from their experience. Moreover, the greater hedonic value observed among international foreign visitors is due to the deeper feeling of escapism they experience by traveling abroad. We also demonstrate that this effect is explained by the concept of psychic distance, whereby going abroad leads to a greater perception of psychic distance, and subsequently escapism, hedonic value, and satisfaction with the tourism experience. [ABSTRACT FROM AUTHOR]

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 (empirical / conceptual): conceptual

Copyright of Journal of International Business Studies is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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.

Psychic distance is a key element in the field of international marketing. Unfortunately, the literature exhibits a lack of consistency with respect to its effects. To help increase understanding of the influence of psychic distance, the authors investigate business and cultural psychic distance as separate constructs. They develop a model in which an export manager's business and cultural psychic distance influences the structuring of the export relationship (i.e., whether it has complementarity of capabilities) and explore whether business and cultural psychic distance enhances or dampens the leveraging of complementary capabilities to increase an export manager's satisfaction with export performance. The results, based on a survey of 151 U.S. export managers, indicate that when export managers perceive greater business psychic distance, they select export partners with fewer complementary capabilities. Although more complementarity of capabilities results in greater satisfaction with export performance, this relationship is moderated by psychic distance. Specifically, greater cultural psychic distance enhances the positive influence of partner complementarity of capabilities on satisfaction with export performance, whereas greater business psychic distance dampens the positive influence of partner complementarity of capabilities on satisfaction with export performance. [ABSTRACT FROM AUTHOR]