Impact Of Psychic Distance Research Articles

Does Psychic Distance Still Matter? Empirical Evidence from Poland

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. Research methodology: The article is based on quantitative research conducted among managers from 201 Poland-based companies operating in foreign markets. The study used a structured questionnaire consisting mainly of closed questions. The dataset contained companies representing all sizes, industries, and ownership status from all over Poland. Findings: Two types of companies were identified following managers’ (un)willingness to initiate relationships with actors located in psychically distant markets. The study conclusions reveal that psychic distance matters for Polish managers and that business activities conducted in psychically distant markets are often perceived as more complex than in close markets. These activities involve additional risk, but they bring companies better performance. Limitations: The limitation of the study is that the measurements are based on the subjective perceptions of psychic distance. The research was conducted in Poland only. Originality: The article is a pioneer work on the psychic distance paradox among Polish managers from a diversified group of companies (from small to multinational). The article seeks to identify to what extent Polish managers perceive psychic distance as an important factor in the decision-making process concerning the initiation of relationships with foreign partners.

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

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.

Impact of sequence of international entries on country exits

ABSTRACTA 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.

Impact of Psychic Distance on Global Brand Acceptance

Impact of Psychic Distance on Global Brand Acceptance

HOW DOES PSYCHIC DISTANCE IMPACT EXPORT MARKETING STRATEGY AND ITS PERFORMANCE: CONCEPTUAL INSIGHTS

Recent empirical findings indicate that psychic distance is positively associated with export marketing strategy adaptation. Also it is assumed that psychic distance may have a greater impact on the SME because such firms probably lack internal resources to reduce psychic distance in terms of obtaining relevant information. The review of the literature indicates that adaptation requires a higher degree of resources and that there is a strong link between the level of international competence and the degree of adaptation. However, smaller sized firms are usually associated with a smaller amount of available resources. Thus, the impact of psychic distance on the choice of export marketing strategy and its performance outcomes is likely to be contingent on the internal resources and international experience.The aim of the article is to develop a conceptual framework depicting the relationship between psychic distance, export marketing strategy and performance outcomes in the case of SME.DOI: http://dx.doi.org/10.5755/j01.em.18.4.5714

Determinantes en la Estrategia de Internacionalización para las Pymes: el Caso de Chile

The rapid internationalization of business can be a very important factor in their development, so that they can then become established companies that create more jobs and develop innovation. Through the observation of a group of Chilean SMEs, this paper aims to verify compliance with the accelerated internationalization theory developed by Oviatt and McDougall (1994) for Chile. Analyzing a sample of 112 SMEs it could be shown that in the case of Chile, there are factors proposed in the literature, such as support networks, the size of the company and the technological level of the industry, that not necessarily accelerate the internationalization strategy. Moreover, the impact of psychic distance and previous experience are be factors to accelerate the search for international markets. From these results, it is suggested that policy makers should focus more on strengthening the human capital of individual entrepreneurs, instead of institutional aspects.

The Impact of Psychic Distance on Consumers' Behavior in International Online Purchasing

ABSTRACT This article investigates the link between psychic distance (PD) and consumers' behavior toward international online vendors (IOVs). A combination of individual and focus group interviews, involving 51 individuals, provide the data for findings that show (1) high uncertainty hindering exchange with IOVs associated with high PD, (2) PD changes as the customers gain access to information forming trust toward specific IOVs, and (3) a better understanding of PD's impact on consumers' behavior can be gained through a relationship and network approach. The article's customer perspective on the impact of PD broadens the understanding of international online behavior and contributes to the debate on PD in international marketing.

The Impact of Psychic Distance on Chinese Outward Foreign Direct Investments

The aim of this paper is to investigate the value of the well-known construct of psychic distance, developed to explain the internationalization path of firms from developed countries, for the internationalization of Chinese firms. Our research question is: Does psychic distance and its individual stimuli (differences in language, religion, culture, economic development, political systems, education, and geographic distance) explain Chinese investments abroad? We test hypotheses on the relation between psychic distance and its stimuli and Chinese outward direct investments with OLS regression analyses. We find that Chinese OFDI indeed is influenced by an aggregate construct of psychic distance and by certain psychic distance stimuli, but not by all; in particular, similarities or differences with regard to language and culture, the level of industrialization and the level of democracy relate to Chinese firms’ internationalization. Our findings suggest that psychic distance and its stimuli cannot be ignored as explanatory factors for Chinese outward FDI but that the explanatory value of these constructs depends on the context of the phenomenon under study. We conclude that it is important to understand how the home country context influences managerial perceptions and thereby patterns of international expansion from different regions.

The Impact of Psychic Distance on Chinese Outward Foreign Direct Investments

Following, Deng Xiaoping’s tour of South China in 1992 and the introduction of the “Go Global” policy in 1999, Chinese outward FDI has experienced a significant increase. However, despite the heap ...

Psychic Distance and Budget Control of Foreign Subsidiaries

This paper has two purposes: (1) to develop a theory about the impact of psychic distance on management control of multinational companies, and (2) to establish that psychic distance is an important factor for future research. We develop the concept of psychic distance, the interaction between geographic distance and culture, and test its impact empirically in a Finnish multinational company.Results show that psychic distance interacts significantly with reliance on budget control in multinational companies, but not in the manner proposed. High budget emphasis is associated with high subunit performance in countries with small psychic distances, but not in countries with larger psychic distances. Budget participation dilutes this impact. This study confirms that psychic distance is a relevant factor to be considered in future research.

The Impact of Psychic Distance on the Internationalisation of the Australian Firm

This paper explores the relationship between management characteristics and psychic distance, psychic distance and internationalisation and management characteristics and internationalisation. It is argued that internationalisation takes different forms and that psychic distance will impact differently on each form whether it is outward, inward or linked. It is shown that whereas some management characteristics impact on internationalisation directly, others have impact through psychic distance acting as an intervening variable. The management implications for the above are discussed, as is its effect on planning future international activities.