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Psychic Distance and Organizational Performance: An Empirical Examination of International Retailing Operations

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  • Jody Evans

    (Melbourne Business School)

  • Felix T Mavondo

    (Monash University)

Abstract

We develop a reconceptualization and operationalization of psychic distance that broadens the concept. We then empirically test this operationalization and investigate the relationship between psychic distance and organizational performance. Our results suggest that psychic distance, as a summary construct, explains a significant proportion of the variance in financial performance and strategic effectiveness. However, disaggregation of the construct substantially increases its explanatory power. The results also support a psychic distance paradox, where psychic distance has a positive relationship with organizational performance.© 2002 JIBS. Journal of International Business Studies (2002) 33, 515–532

Suggested Citation

  • Jody Evans & Felix T Mavondo, 2002. "Psychic Distance and Organizational Performance: An Empirical Examination of International Retailing Operations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(3), pages 515-532, September.
    • Handle: RePEc:pal:jintbs:v:33:y:2002:i:3:p:515-532
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