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The Concept of Distance in International Business Research: A Review and Research Agenda

Published on Apr 1, 2016in International Journal of Management Reviews
· DOI :10.1111/ijmr.12065
Thomas Hutzschenreuter17
Estimated H-index: 17
(WHU - Otto Beisheim School of Management),
Ingo Kleindienst7
Estimated H-index: 7
(AU: Aarhus University),
Sandra Lange2
Estimated H-index: 2
(WHU - Otto Beisheim School of Management)
Sources
Abstract
This paper reviews the literature on the effects of distance arising from country differences on outcomes at the firm and subsidiary level. It provides some clarity on what has been learned so far about distance by answering four questions: Which distance? Why does distance matter? What outcomes are affected by distance? and What aggravates or alleviates the effects of distance? Based on the review of the literature, a set of future research suggestions are developed, intended to direct attention to research questions that the authors believe are among the most pressing questions in distance research and that may have the potential to advance the field substantially.
  • References (166)
  • Citations (36)
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References166
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Since the 1950s, there has been growing interest among researchers in the investigation of the "distance" factor as an explanatory variable in the theory of international trade and investment. In earlier studies, distance was normally defined as physical distance, or in terms of some other related concepts such as transport cost. Transport costs, for example, qualified the operation of the law of comparative advantage in international trade theory (Daniels, Ogram, and Radebaugh 1979). It was not...
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This article examines the acquisition behavior of multinational companies from emerging markets (EMNCs) compared to multinational companies from advanced markets (AMNCs). Specifically, we relate the governance mode (i.e. the degree of commitment) to exogenous and endogenous uncertainty. As a result of endogenous uncertainty due to their liability of origin, EMNCs are likely to acquire less control, which is exacerbated by exogenous uncertainty when acquiring targets in high-tech sectors. Further...
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Purpose – The purpose of this paper is to explore the marketing “processes” of governing multiple export relationships under the theoretical framework of governance value analysis (GVA). Specifically, this work examines the internal exchange attributes of transaction-specific investments and psychic distance on the adaptation/standardization of relational behavior and detailed contracting and how process adaptation/standardization influences new product outcomes and jointly created value in the ...
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The effect of distance on firms' performance when entering, operating in and across foreign markets is a central issue in international management. However, our understanding of the impact of distance has long been constrained by flawed conceptualizations and unreliable measures. The papers in this issue break new ground both by advancing our theoretical understanding and by introducing new and potentially more useful measures. In this introduction, we provide a brief overview of the evolution o...
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#1Julien Gooris (ULB: Université libre de Bruxelles)H-Index: 2
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Distance has long been recognized as a major impediment in MNEs' international expansion. However, it still remains unclear: (1) If different psychic distance stimuli (PDS) constitute different sources of complexity and (2) how PDS affect MNE performance during international expansion. That is, the unconditioned argument that distance increases complexity needs further development, specifically, with regard to the nature of distance. In this study we distinguish between different PDS and provide...
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Abstract The objective of this article is to examine the relevant dimensions of distance for foreign market entry mode choice. Based on a sample of 203 interfirm linkages formed by French multinationals with partners across the world, we analyze the impact of four dimensions of distance on the choice between cooperative alliances and mergers-acquisitions. The findings indicate that administrative and economic distance have a significant influence on market entry mode choice, whereas the impact o...
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Abstract Prior research has viewed institutional distance as a critical factor in decisions about ownership level in foreign affiliates. Research has also long highlighted the relevance of distance perceptions in internationalization decisions. Yet, so far, little attention has been devoted to how decision makers perceive institutional differences across countries and how these perceptions may affect ownership level decisions. We build on international business, institutional, and upper echelons...
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