Can differences be turned to positives? An empirical investigation of psychic distance, trust, and commitment in Malaysian exporters

Abstract

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 concept relating to those differences, psychic distance is an influential factor in relationship development, but the literature provides mix empirical evidence about its effects. We analyzed the impact of psychic distance on two central constructs of relationship: trust and commitment, in the context of Malaysia. Our survey results from Malaysian exporters indicate that psychic distance affects trust, but not commitment. More importantly, we found different results for dimensions of psychic distance. While cultural differences affect trust negatively, business-legal difference and differences in product adaptation have positive effects on trust. The reasons for and implications of these results, as well as new avenues for future research, are discussed.