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The antecedents of psychic distance

  • Håkanson, Lars
  • Ambos, Björn
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    This study investigates the antecedents of psychic distance. Building on original data in 25 of the world's largest economies, we investigate potential drivers of perceived psychic distances to foreign countries. The results show these perceptions to be influenced by a range of cultural, geographic, political and economic factors. Among these, absolute geographic distance accounts for the largest share of the explained variance, suggesting that physical distance should be given a more prominent role when it comes to empirically investigating international business decisions for which psychic distance perceptions may be important. The findings also suggest that, used in isolation, 'cultural distance' - as measured by the so called Kogut and Singh index - is a poor predictor of such perceptions.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1075425310000360
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    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 16 (2010)
    Issue (Month): 3 (September)
    Pages: 195-210

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    Handle: RePEc:eee:intman:v:16:y:2010:i:3:p:195-210
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