Relevant dimensions and contextual weights of distance in international business decisions: Evidence from Spanish and chinese outward FDI

International Business Review

Volumn 24, Issue 1, 2015, Pages 133-147

  Drogendijk, Rian ^a   Martín Martín, Oscar ^a,b  

^a UPPSALA UNIVERSITY   (Sweden)

^b PUBLIC UNIVERSITY OF NAVARRE   (Spain)

Author keywords

Contextual weights; Country distance; Dimensions of distance; FDI

Indexed keywords

EID: 84922664841     PISSN: 09695931     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ibusrev.2014.07.003     Document Type: Article

References (116)

1. Alguacil M.T., Orts V. A multivariate cointegrated model testing for temporal causality between exports and outward foreign investment: The Spanish case. Applied Economics 2002, 34(1):119-132.
2. Ambos B., Håkanson L. The concept of distance in international management research. Journal of International Management 2014, 20(1):1-7.
3. Berry H., Guillén M.F., Zhou N. An institutional approach to cross-national distance. Journal of International Business Studies 2010, 41(9):1460-1480.
4. Beugelsdijk S., McCann P., Mudambi R. Introduction: Place, space and organization - Economic geography and the multinational enterprise. Journal of Economic Geography 2010, 10(4):485-493.
5. Blomkvist K., Drogendijk R. The impact of psychic distance on Chinese outward foreign direct investments. Management International Review 2012, 53(5):659-686.
6. Boyacigiller N. The role of expatriates in the management of interdependence, complexity, and risk in multinational corporations. Journal of International Business Studies 1990, 21(3):357-381.
7. Brewer P.A. Operationalizing psychic distance: A revised approach. Journal of International Marketing 2007, 15(1):44-66.
8. Brewer P.A. Psychic distance and Australian export market selection. Australian Journal of Management 2007, 32(1):73-94.
9. Buckley P.J. Is the international business research agenda running out of steam?. Journal of International Business Studies 2002, 33(2):365-373.
10. Buckley P.J., Clegg L.J., Cross A.R., Liu X., Voss H., Zheng P. The determinants of Chinese outward foreign direct investment. Journal of International Business Studies 2007, 38(4):499-518.
11. Cavusgil S.T., Kiyak T., Yeniyurt S. Complementary approaches to preliminary foreign market opportunity assessment: County clustering and country ranking. Industrial Marketing Management 2004, 33(7):607-617.
12. Child J., Ng S.H., Wong C. Psychic distance and internationalization. International Studies of Management and Organizations 2002, 32(1):36-56.
13. Child J., Rodrigues S.B., Frynas J.G. Psychic distance, its impact and coping modes: Interpretations of SMEs decision-makers. Management International Review 2009, 49(2):199-224.
14. Chin W.W., Newsted P.R. Structural equation modeling analysis with small samples using partial least squares. Statistical strategies for small sample research 1999, 307-341. Sage, Thousand Oaks. R. Hoyle (Ed.).
15. Clark T., Pugh D.S. Foreign country priorities in the internationalization process: A measure and an exploratory test on British firms. International Business Review 2001, 10(3):285-303.
16. Clifton J., Díaz-Fuentes D., Ruiz E. Inward FDI in Spain and its policy context. Columbia FDI Profiles 2011.
17. Cuervo-Cazurra A., Genc M. Converting disadvantages into advantages: Developing country MNEs in the least developed countries. Journal of International Business Studies 2008, 39(6):957-979.
18. Delios A., Beamish P.W. Ownership strategy of Japanese firms: Transaction, institutional, and experience influences. Strategic Management Journal 1999, 20(10):915-933.
19. Diamantopoulos A., Riefler P., Roth K.P. Advancing formative measurement models. Journal of Business Research 2008, 61(12):1203-1218.
20. Diamantopoulos A., Siguaw J.A. Formative versus reflective indicators in organizational measure development: A comparison and empirical illustration. British Journal of Management 2006, 17(4):263-282.
21. Douglas S.P., Craig C.S. The role of context in assessing international marketing opportunities. International Marketing Review 2011, 28(2):150-162.
22. Dow D. A note on psychic distance and export market selection. Journal of International Marketing 2000, 8(1):51-64.
23. Dow D., Ferencikova S. More than just national cultural distance: Testing new distance scales on FDI in Slovakia. International Business Review 2010, 19(1):46-58.
24. Dow D., Karunaratna A. Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies 2006, 37(5):578-602.
25. Dow D., Larimo J. Challenging the conceptualization and measurement of distance and international experience in entry mode research. Journal of International Marketing 2009, 17(2):74-98.
26. Dow D., Larimo J. Disentangling the roles of international experience and distance in establishment mode choice. Management International Review 2011, 51(3):321-355.
27. Drogendijk R., Blomkvist K. Influence of cultural distance on Chinese outward foreign direct investment. Emerging economies and firms in the global crisis 2012, 154-178. Palgrave MacMillan Publishers, Basingstoke, UK. M.A. Marinov, S. Marinova (Eds.).
28. Drogendijk R., Slangen A. Hofstede, Schwartz, or managerial perceptions: The effects of various cultural distance measures on establishment mode choices by multinational enterprises. International Business Review 2006, 15(4):361-380.
29. Drogendijk R., Zander L. Walking the cultural distance - In search of direction beyond friction. Advances of International Management 2010, 23:189-212.
30. Ellis P.D. Does psychic distance moderate the market size-entry sequence relationship?. Journal of International Business Studies 2008, 39(3):351-369.
31. Estrin S., Baghdasaryan D., Meyer K.E. The impact of institutional and human resource distance on international entry strategies. Journal of Management Studies 2009, 46(7):1171-1196.
32. Ethnologue. (2008). Statistical summaries. Retrieved from . https://www.ethnologue.com/ethno_docs/distribution.asp%3Fby=area.
33. Evans J., Mavondo F.T. Psychic distance and organizational performance: An empirical examination of international retailing operation. Journal of International Business Studies 2002, 33(3):515-532.
34. Evans J., Mavondo F.T., Bridson K. Psychic distance: Antecedents, retail strategy implications, and performance outcomes. Journal of International Marketing 2008, 16(2):32-63.
35. Evans J., Treadgold A., Mavondo F. Explaining export development through psychic distance. International Marketing Review 2000, 17(2):164-169.
36. Farrell A.M. Insufficient discriminant validity: A comment on Bove, Pervan, Beatty, and Shiu (2009). Journal of Business Research 2010, 63(3):324-327.
37. Fornell C., Larcker D. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research 1981, 18(1):39-50.
38. Galan J.I., Gonzalez-Benito J. Distinctive determinant factors of Spanish FDI in Latin America. Journal of World Business 2006, 41(2):171-189.
39. Galan J.I., González J., Zúñiga Vicente J.A. Factors determining the location decisions of Spanish MNEs: An analysis based on the investment development path. Journal of International Business Studies 2007, 38(6):975-997.
40. Gao L., Liu X., Zou H. The role of human mobility in promoting Chinese outward FDI: A neglected factor?. International Business Review 2013, 22(2):437-449.
41. Gaston-Breton C., Martín Martín O. International market selection and segmentation: A two-stage model. International Marketing Review 2011, 28(3):267-290.
42. Gaur A.S., Delios A., Singh K. Institutional environments, staffing strategies, and subsidiary performance. Journal of Management 2007, 33(4):611-636.
43. Gaur A.S., Lu J.W. Ownership strategies and survival of foreign subsidiaries: Impacts of institutional distance and experience. Journal of Management 2007, 13(1):84-110.
44. Ghemawat P. Distance still matters: The hard reality of global expansion. Harvard Business Review 2001, 79(8):137-147.
45. Gugler P., Fetscherin M. The role and importance of the Chinese government for Chinese outward foreign direct investments. AIB Insights 2010, 10:12-15.
46. Hair J.F., Sarstedt M., Pieper T.M., Ringle C.M. The use of partial least squares structural equation modeling in strategic management research: A review of past practices and recommendations for future applications. Long Range Planning 2012, 45(5):320-340.
47. Håkanson L., Ambos B. The antecedents of psychic distance. Journal of International Management 2010, 16(3):195-210.
48. Harzing A.W.K. The role of culture in entry mode studies: From negligence to myopia?. Advances in International Management 2003, 15:75-127.
49. Henisz W.J. The institutional environment for multinational investment. Journal of Law, Economics and Organization 2000, 16(2):334-364.
50. Henisz W.J. The institutional environment for economic growth. Economics and Politics 2000, 12(1):1-31.
51. Hofstede G. Culture's consequences: International differences in work-related values 1980, Sage, Beverly Hills.
52. House R.J., Hanges P.J., Javidan M., Dorfman P., Gupta V. Culture, leadership, and organizations: The GLOBE study of 62 societies 2004, Sage, Thousand Oaks.
53. Hutchingson W.K. "Linguistic Distance" as a determinant of bilateral trade. Southern Economic Journal 2005, 72(1):1-15.
54. Hutzschenreuter T., Kleindienst I., Lange S. Added psychic distance stimuli and MNE performance: Performance effects of added cultural, governance, geographic, and economic distance in MNEs' international expansion. Journal of International Management 2014, 20(1):38-54.
55. Inglehart R. Modernization and postmodernization: Cultural, economic, and political change in 43 societies 1997, Princeton University Press, Princeton, NJ.
56. Inglehart R., Welzel C. Modernization, cultural change, and democracy. The human development sequence 2005, Cambridge University Press, Cambridge.
57. Jackson G., Deeg R. Comparing capitalisms: Understanding institutional diversity and its implications for international business. Journal of International Business Studies 2008, 39(4):540-561.
58. Jarvis C.B., MacKenzie S.B., Podsakoff P.M. A critical review of construct indicators and measurement model misspecification in marketing and consumer research. Journal of Consumer Research 2003, 30(2):199-218.
59. Jiménez A., Durán J.J., de la Fuente J.M. Political risk as a determinant of investment by Spanish multinational firms in Europe. Applied Economics Letters 2011, 18(8):789-793.
60. Johanson J., Vahlne J.-E. The internationalisation process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies 1977, 8(1):23-32.
61. Johanson J., Vahlne J.-E. The mechanism of internationalization. International Marketing Review 1990, 7(1):11-24.
62. Johanson J., Wiedersheim-Paul F. The internationalisation of the firm: Four Swedish cases. Journal of Management Studies 1975, 12(3):305-322.
63. Kogut B., Singh H. The effect of national culture on the choice of entry mode. Journal of International Business Studies 1988, 19(3):411-432.
64. Kostova T. Country institutional profiles: Concept and measurement. Best paper proceedings of the academy of management 1997, 180-184.
65. Kostova T. Transnational transfer of strategic organizational practices: A contextual perspective. Academy of Management Review 1999, 24(2):308-324.
66. Liu X., Buck T., Shu C. Chinese economic development, the next stage: Outward FDI?. International Business Review 2005, 14(1):97-115.
67. Luo Y. Toward a cooperative view of MNC-host government relations: Building blocks and performance implications. Journal of International Business Studies 2001, 32(3):401-419.
68. Luo Y., Shenkar O. Toward a perspective of cultural friction in international business. Journal of International Management 2011, 17(1):1-14.
69. Makino S., Tsang E.W.K. Historical ties and foreign direct investment: An exploratory study. Journal of International Business Studies 2011, 42(4):545-557.
70. Malhotra S., Sivakumar K., Zhu P.C. Distance factors and target market selection: The moderating effect of market potential. International Marketing Review 2009, 26(6):651-673.
71. Martín Martín O., Drogendijk R. Country distance (COD): Development and validation of a new objective measure. Journal of Small Business Management 2014, 52(1):102-125.
72. Meredith M. The fate of Africa - A history of fifty years of independence 2005, Perseus Books Grp, Cambridge.
73. Morck R., Yeung B., Zhao M. Perspectives on China's outward foreign direct investment. Journal of International Business Studies 2008, 39(3):337-350.
74. Narula R., Guimón J. The investment development path in a globalized world: Implications for Eastern Europe. Eastern Journal of European Studies 2010, 1(2):5-19.
75. O'Grady S., Lane H.W. The psychic distance paradox. Journal of International Business Studies 1996, 27(2):309-333.
76. Okeahalam C.C., Wood S. Financing internationalization: A case study of an African retail transnational corporation. Journal of Economic Geography 2009, 9(4):511-537.
77. Papadopoulos N., Martín Martín O. Toward a model of the relationship between internationalization and export performance. International Business Review 2010, 19(4):388-406.
78. Peng M.W., Heath P.S. The growth of the firm in planned economies in transition: Institutions, organizations, and strategic choice. Academy of Management Review 1996, 21(2):492-528.
79. Prime N., Obadia C., Vida I. Psychic distance in exporter-importer relationships: A grounded theory approach. International Business Review 2009, 18(2):184-198.
80. Rauch J.E. Networks versus markets in international trade. Journal of International Economics 1999, 48(1):7-35.
81. Reus T., Lamont B. The double-edged sword of cultural distance in international acquisitions. Journal of International Business Studies 2009, 40(8):1298-1316.
82. Ricks D.A. Big business blunders: Mistakes in multinational marketing 1983, Dow Jones-Irwin, Homewood.
83. Ronen S., Shenkar O. Mapping world cultures: Cluster formation, sources and implications. Journal of International Business Studies 2013, 44(9):867-897.
84. Rui H., Yip G.S. Foreign acquisitions by Chinese firms: A strategic intent perspective. Journal of World Business 2008, 43(2):213-226.
85. Salk J. Changing IB scholarship via rhetoric or bloody knuckles? A case study in the boundary conditions for persuasion. Journal of International Business Studies 2012, 43(1):28-40.
86. Salomon R., Wu Z. Institutional distance and local isomorphism strategy. Journal of International Business Studies 2012, 43(4):894-909.
87. Sauvant K.P. Three challenges for China's outward FDI policy. Columbia FDI Perspectives 2013, 106. October 4, 2013.
88. Schomaker M.S., Zaheer S. The role of language in knowledge transfer to geographically dispersed manufacturing operations. Journal of International Management 2014, 20(1):55-72.
89. Schwartz S.H. Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. Advances in Experimental Social Psychology 1992, 25(C):1-65.
90. Schwartz S.H. Beyond individualism/collectivism: New cultural dimensions of values. Individualism and collectivism: Theory, method, and applications 1994, 85-119. Sage, Thousand Oaks. U. Kim, H.C. Triandis, C. Kagitcibasi, G. Yoon (Eds.).
91. Scott R. Institutions and organizations 1995, Sage, Thousand Oaks.
92. Shenkar O. Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies 2001, 32(3):519-535.
93. Shenkar O. Beyond cultural distance: Switching to a friction lens in the study of cultural differences. Journal of International Business Studies 2012, 43(1):12-17.
94. Shenkar O., Luo Y., Yeheskel O. From "distance" to "friction": Substituting metaphors and redirecting intercultural research. Academy of Management Review 2008, 33(4):905-923.
95. Sivakumar K., Nakata C. The stampede toward Hofstede's framework: Avoiding the sample design pit in cross-cultural research. Journal of International Business Studies 2001, 32(3):555-574.
96. Sousa C.M.P., Bradley F. Cultural distance and psychic distance: Two peas in a pod?. Journal of International Marketing 2006, 14(1):49-70.
97. Sousa C.M.P., Lages L.F. The PD scale: A measure of psychic distance and its impact on international marketing strategy. International Marketing Review 2011, 28(2):201-222.
98. Steenkamp J.B.E.M., Ter Hofstede F. International market segmentation: Issues and perspectives. International Journal of Research in Marketing 2002, 19(3):185-213.
99. Stoian C. Extending Dunnings's investment development path: The role of home country institutional determinants in explaining outward foreign direct investment. International Business Review 2013, 22(3):615-637.
100. Stoian C., Filippaios F. Dunning's eclectic paradigm: A holistic, yet context specific framework for analysing the determinants of outward FDI. Evidence from international Greek investments. International Business Review 2008, 17(3):349-367.
101. Stöttinger B., Schlegelmilch B.B. Explaining export development through psychic distance: Enlightening or elusive?. International Marketing Review 1998, 15(5):357-372.
102. Stöttinger B., Schlegelmilch B.B. Psychic distance: A concept past its due date?. International Marketing Review 2000, 17(2):169-173.
103. Taras V., Rowney J., Steel P. Half a century of measuring culture: Review of approaches, challenges, and limitations based on the analysis of 121 instruments for quantifying culture. Journal of International Management 2009, 15(4):357-373.
104. Terpstra V., Yu C.-M. Determinants of foreign investment of U.S. advertising agencies. Journal of International Business Studies 1988, 19(1):33-46.
105. Tihanyi L., Griffith D., Russell C. The effect of cultural distance on entry mode choice, international diversification, and MNE performance: A meta-analysis. Journal of International Business Studies 2005, 36(3):270-283.
106. Tsang E.W.K., Yip P.S.L. Economic distance and the survival of foreign direct investments. Academy of Management Journal 2007, 50(5):1156-1168.
107. Vahlne J.-E., Wiedersheim-Paul F. Psychic distance: An inhibiting factor in international trade. Working Paper No. 2 1977, Centre for International Business Studies, Department of Business Administration, Uppsala University.
108. Wan W.P., Hoskisson R.E. Home country environments, corporate diversification strategies, and firm performance. Academy of Management Journal 2003, 46(1):27-46.
109. Wang C., Hong J., Kafouros M., Boateng A. What drives the internationalization of Chinese firms? Testing the explanatory power of three theoretical frameworks. International Business Review 2012, 21(3):426-438.
110. Welch D.E., Welch L.S., Marschan-Piekkari R. The persistent impact of language on global operations. Prometheus 2001, 19(3):193-209.
111. Werts C.E., Linn R.L., Jöreskog K.G. Intraclass reliability estimates: Testing structural assumptions. Educational and Psychological Measurement 1974, 34(1):25-33.
112. West J., Graham J.L. A linguistic-based measure of cultural distance and its relationship to managerial values. Management International Review 2004, 44(3):239-260.
113. Wetzels M., Odekerken-Schröder G., Van Oppen C. Using PLS path modeling for assessing hierarchical construct models: Guidelines and empirical illustration. MIS Quarterly 2009, 33(1):177-195.
114. Wold H. Soft modeling. The basic design and some extensions. Systems under indirect observation: Causality, structure, prediction. Part 2 1982, 1-54. North Holland, Amsterdam. K.G. Jöreskog, H. Wold (Eds.).
115. Xu D., Shenkar O. Institutional distance and the multinational enterprise. Academy of Management Review 2002, 27(4):608-618.
116. Zaheer S., Spring Schomaker M., Nachum L. Distance without direction: Restoring credibility to a much-loved construct. Journal of International Business Studies 2012, 43(1):18-27.