The notion of distance in International Business
This empirical study aims at providing a better understanding of the various types of distance (cognitive, cultural, geographic, institutional, psychic) present in the International Business literature. As the lexicographic and content analysis reveals, some are often mixed up and therefore not adequately theorized upon and operationalized. Based on the 46 years of publications of the Journal of International Business Studies, this paper indicates for each type of distance how they are defined, operationalized, what they are applied to, and how they are related to the other types of distance.
Using X-Culture data (http://x-culture.org/), I challenge most of the current assumptions of psychic distance by (1) considering two different facets of the concept (as perceived differences and as perceived difficulties: greater differences do not necessarily mean greater difficulties) and (2) exploring their multi-level antecedents rather than solely focusing on the macro-level ones such as which home and host countries are considered and the objective differences (in terms of culture, systems of governance, geographical distance, etc.) between the two. Most of the variance associated with psychic distance aggregated at the country-level remains unexplained by CAGE distances (Ghemawat, 2001), psychic distance stimuli (Dow & Karunaratna, 2006), the Big Five personality traits (McCrae & Terracciano, 2005; McCrae, Terracciano & Allik, 2007), the Good Country index dimensions and the World Happiness Report, reassessing the need to focus on the individual level for this specific type of distance.
Stereotypes, dynamic psychic distance and decision-making processes (future research)
In continuation of my PhD dissertation on psychic distance, I wish to pursue research related to (1) how individuals perceive foreignness (positively or not, challenging or not, interesting or not, dangerous or not, etc.), (2) why they hold such perceptions (rampant stereotypes, first-hand experience, etc.?) and (3) what can be done to change them into a more positive assessment (framing experiments, training, learning, etc.?).
Strategies of internationalization of firms (future research)
I am interested in refining and suggesting new leads in the research on international expansion patterns. The model developed by Uppsala scholars (Johanson & Vahlne, 1977; Johanson & Wiedersheim-Paul, 1972) fails to account for patterns observed empirically. However their reasoning in terms of increasing psychic distance is appealing and makes sense logically: managers being risk averse, they will favor locations they feel familiar with in order to reduce the uncertainty associated with doing business abroad. Therefore I suggest new approaches to be explored: the first one is a new operationalization of the concept of distance (either focusing on psychic distance, or considering overlap instead of distance), since the currently dominant one, the Kogut & Singh (1988) index is flawed; a second one discusses the potential of adding the notion of ambidexterity, from the exploration/exploitation paradigm, into the picture; a last one confronts neoinstitutionalism and game theory to predict competitors moves and their influence on the location choices of the firm. I hope to contribute to the international business literature in two ways: first, validating and completing the learning perspective of internationalization; second, bringing evidence that the operationalization of distance needs to be modified to be useful.
|Last modified:||02 February 2017 10.19 a.m.|