Addressing psychic distance and learning in international buyer-seller relationships: The role of firm exploration and asset specificity

Liu, Steven Y.H.; Deligonul, Seyda; Çavuşgil, S. Tamer; Chiou, Jyh‐Shen

doi:10.1016/j.jwb.2021.101208

Cited by 10 publications

(9 citation statements)

References 134 publications

(338 reference statements)

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“…, 2021) with knowledge of the target market; hence, the MPD regarding the target market did not allow them to operate independently. The firm needed to rely on bridge-makers who possessed knowledge about the target market in terms of culture, legal systems, political systems (Dikova, 2009; Johanson and Wiedersheim-Paul, 1975; Liu et al. , 2021) and business-level factors such as competitors, customer knowledge, and other business difficulties (Child et al.…”

Section: Discussionmentioning

confidence: 99%

Triadic multilevel psychic distance in firm internationalization

Safari

2024

IMR

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PurposeThis study focuses on the triadic multilevel psychic distance (MPD) between the firm, target market and bridge-maker and its consequences for firm internationalization. Specifically, it spotlights the triadic psychic distance between firms, the levels of psychic distance in the target market (country and business) and the bridge-maker. Therefore, this study examines the triadic MPD among these three entities and its impact on firm internationalization.Design/methodology/approachThis study uses qualitative and case study research approaches. It is based on 8 case companies and 24 internationalization cases. Secondary data were collected, and interviews with bridge-makers and industry experts were conducted.FindingsThe study found that MPD appeared in the triad. The MPD between firms and markets is related to country-specific differences and business difficulties. The MPD between the firm and the bridge-maker is based on the latter’s lack of knowledge vis-à-vis bridging the firm’s MPD. Finally, the MPD between bridge-makers and the market is based on the former’s lack of knowledge of the home country’s business difficulties.Originality/valueThis is the first study to develop and adopt a triadic multilevel psychic distance conceptualization that provides evidence for and sheds light on the triadic MPD and its effect on firm internationalization. This study identifies the reasons behind triadic MPD in connection to firm internationalization. Notably, firm internationalization is interdependent on the triadic MPD setting between the firm, bridge-maker and target market. It has theoretical value and contributes to the recent advancement in the understanding of MPD in international marketing literature.

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Section: Discussionmentioning

confidence: 99%

Triadic multilevel psychic distance in firm internationalization

Safari

2024

IMR

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“…Suppliers can achieve higher margins, have more stable and predictable cash flows over time and increase competitiveness through buyer lock-in (Schmenner, 2009; Kreye and van Donk, 2021). Although asset specificity creates lock-in conditions, this condition motivates all parties to focus resources on relationship-specific learning (Liu et al , 2021).…”

Section: Discussionmentioning

confidence: 99%

“…Transaction cost theory initially identified asset specificity and uncertainty as key exchange attributes that increase the potential for opportunism and lock-in risk (Colm et al , 2019). The lock-in effect allows investors to commit to capitalizing on their previous asset specificity investments (Selnes and Sallis, 2003; Liu et al , 2021). Previous literature discussed how servitization create value and generate customer lock-in mainly focused on how servitization enables manufacturers to respond more effectively to customer needs, preventing competitors from gaining a foothold in their market (Baines, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

Mastering customer lock-in by servitization innovation strategies of asset specificity

Chiu,

Dai,

Chi

2023

JBIM

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Purpose This study aims to explore how manufacturing firms master customer lock-in through value creation by servitization innovation strategies from the perspective of asset specificity. Design/methodology/approach A multiple case study with triangulation fashion is adopted to identify servitization innovation strategies. Several manufacturing firms were investigated, which are distributed in different positions of the value chain. Content analysis and abductive approaches are adopted to analyze the data. Moreover, an in-depth interview and participatory observation were conducted to refine the analysis results. Findings This study identified four different focusing points of servitization operations. Based on these, the paper further induces an innovative servitization strategy matrix of customer lock-in, concerning communion, intellectual, existential and insubstantial strategies. Furthermore, a conceptual model of customer lock-in by servitization innovation from the perspective of asset specificity is elaborated. It is suggested that companies can use tangible or intangible resources by sharing or storing operations to create servitization value. Originality/value This study theoretically proposes a conceptual model to extend servitization innovation as an intangible asset and adopt the new perspective of asset specificity to illustrate the value creation in servitization to generate customer lock-in.

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“…The concept of psychic distance assumes that the process of internationalization involves differences (e.g. cultural, economic, legal) that affect the exchange of information, which influences managers' decisions and how they perceive foreign markets (Johanson and Wiedersheim-Paul, 1975;Nebus and Chai, 2014;Liu et al, 2021). In this article, we follow existing studies in understanding the internationalization process as one of initiating and developing relationships with actors in a foreign market (Deszczyński, Fonfara, and Dymitrowski, 2017;Vahlne and Johanson, 2017).…”

Section: Psychic Distance: Concept and Significancementioning

confidence: 99%

“…The concept of psychic distance assumes that individual perceptions of psychic distance may affect managers' choices regarding markets for expansion. Psychic distance has been -and still is -considered an important factor that impacts decisions concerning the selection of potential foreign markets for internationalization (Safari and Chetty, 2019;Moalla and Mayrhofer, 2020;Liu et al, 2021). As a result of globalization, improvements in communication, and the development of new technologies, the concept of psychic distance is evolving.…”

Section: Introductionmentioning

confidence: 99%

Does Psychic Distance Still Matter? Empirical Evidence from Poland

Fonfara¹,

Hauke-Lopes²,

Soniewicki³

2021

CEMJ

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Objective: The objective of the article is to fill a research gap regarding the impact of psychic distance on the initiation of relationships by managers from Poland-based firms and to analyze the psychic distance’s influence on firm performance. Research methodology: The article is based on quantitative research conducted among managers from 201 Poland-based companies operating in foreign markets. The study used a structured questionnaire consisting mainly of closed questions. The dataset contained companies representing all sizes, industries, and ownership status from all over Poland. Findings: Two types of companies were identified following managers’ (un)willingness to initiate relationships with actors located in psychically distant markets. The study conclusions reveal that psychic distance matters for Polish managers and that business activities conducted in psychically distant markets are often perceived as more complex than in close markets. These activities involve additional risk, but they bring companies better performance. Limitations: The limitation of the study is that the measurements are based on the subjective perceptions of psychic distance. The research was conducted in Poland only. Originality: The article is a pioneer work on the psychic distance paradox among Polish managers from a diversified group of companies (from small to multinational). The article seeks to identify to what extent Polish managers perceive psychic distance as an important factor in the decision-making process concerning the initiation of relationships with foreign partners.

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Addressing psychic distance and learning in international buyer-seller relationships: The role of firm exploration and asset specificity

Cited by 10 publications

References 134 publications

Triadic multilevel psychic distance in firm internationalization

Triadic multilevel psychic distance in firm internationalization

Mastering customer lock-in by servitization innovation strategies of asset specificity

Does Psychic Distance Still Matter? Empirical Evidence from Poland

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