Does psychic distance moderate the market size–entry sequence relationship?

Ellis, Paul D.

doi:10.1057/palgrave.jibs.8400360

Cited by 166 publications

(166 citation statements)

References 47 publications

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“…Ellis (2008) also noted that the impact of psychic distance is less visible in a context where market size dominates sellers' decision on target country selection compared to a situation of entering markets of the same size.…”

Section: Discussionmentioning

confidence: 99%

Impact of psychic distance to the internationalization behavior of knowledge‐intensive SMEs

Ojala

Tyrväinen

2009

European Business Review

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PurposeThe purpose of this paper is to investigate the internationalization behavior of knowledge‐intensive small‐ to medium‐sized enterprises (SMEs) by using macro‐level psychic distance indicators and managers' perceptions of psychic distance.Design/methodology/approachThis study uses both quantitative and qualitative approaches. In the quantitative approach, the impact of psychic distance to the internationalization behavior is analyzed by using bivariate correlation analysis. The qualitative case study approach is employed to investigate managers' perceptions of psychic distance as regards market entries.FindingsFindings of this study indicate that psychic distance has an impact on the market entry of knowledge‐intensive SMEs. However, there are other factors, such as market size, opportunity seeking behavior, and actions taken by managers, which make the effect of psychic distance less visible in macro‐level quantitative analyzes.Research limitations/implicationsThis study is limited by small sample size in both quantitative and qualitative studies. However, the findings offer interesting insights for further studies related to this phenomenon.Originality/valueThis study compares macro‐level and individual‐level analyses of psychic distance and indicates reasons why psychic distance should be analyzed with the help of individual‐level perceptions of psychic distance.

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Section: Discussionmentioning

confidence: 99%

Impact of psychic distance to the internationalization behavior of knowledge‐intensive SMEs

Ojala

Tyrväinen

2009

European Business Review

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“…In addition, some export stories are initiated by the foreign buyer and as such the psychological distance of the exporter does not affect at all the export market entry whereas the distance perceived by the foreign buyer is determinant (Ellis, 2008). 9 Nefussi and Schwellnus (2010) represent an exception and prove that internationalisation in services and manufacturing are strictly linked, even if their focus is on FDI and not on the export activity.…”

Section: Spillovers Through Backward Linkages In the Service Firm Intmentioning

confidence: 99%

“…Furthermore, for a given psychological/physical/cultural distance a higher market opportunity increases the incentive for the firm to first penetrate that market (Dow, 2000;Ellis, 2008;Johanson & Wiedersheim-Paul, 1975). If all the uncertainties of internationalisation are removed, managers will prefer larger and richer markets.…”

Section: The Extent Of the Spillover Effectmentioning

confidence: 99%

Spillovers through backward linkages and the export performance of business services. Evidence from a sample of Italian firms

Conti¹,

Turco²,

Maggioni³

2014

International Business Review

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We provide evidence on the role of spillovers through vertical linkages in service firms' internationalisation process. We combine input-output coefficients with region-level information on downstream manufacturing sector exports to build a measure of spillovers through backward linkages, which we assess as a systematic determinant of Italian BS firms' export status. Once considered firm and sector specificities, export spillovers especially matter for exporting to high-income economies outside Europe. This finding originates from higher sunk costs stemming from greater distance to the destination market and tougher competition within the destination market. Furthermore, the spillovers' geographical scope is mainly local. We thus contribute to international business theory by generalising existing evidence from case studies on the importance of buyer-supplier relationships for service firms' internationalisation across several BS sectors. Our research carries important implications for international business practices as well, as joining networks with internationalised customers may play an important role in enhancing BS firms' exports, regardless of the BS supplied. © 2013 Elsevier Ltd

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“…One of them is geographic distance. Differences in the broader institutional environment (in language, religion, per capita income, levels of education, and political systems) may also make it difficult to do banking outside one's own country, and countries that do not share common institutional frameworks are less likely to be linked by M&A activity as bank managers are less likely to expand in countries perceived to be dissimilar ( Ellis, 2008 ). Time zone differences may also complicate the monitoring of foreign banking subsidiaries since they impede communication with HQ.…”

Section: Hypothesis 1d Banks Are Likely To Engage In Mandas In Countrimentioning

confidence: 99%

What drives cross-border M&As in commercial banking?

Gulamhussen

Hennart

Pinheiro

2016

Journal of Banking & Finance

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a b s t r a c tUsing a gravity model, we analyze the determinants of the probability that commercial banks in 89 acquiring countries and 118 target countries will undertake M&As over a 30-year period and of the value of these M&As. We find that the value of cross-border M&As increases with the size of the acquiring country, and that both the probability and value of M&As vary positively with the depth of the financial market in acquirer countries and the presence of corporate and non-corporate customers from acquiring countries in target countries, and negatively with the geographic, psychic, and time zone distances between acquirer and target countries. Our study highlights the role of non-corporate customers and of psychic distance in the cross-border expansion of commercial banks through M&As.

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Does psychic distance moderate the market size–entry sequence relationship?

Cited by 166 publications

References 47 publications

Impact of psychic distance to the internationalization behavior of knowledge‐intensive SMEs

Impact of psychic distance to the internationalization behavior of knowledge‐intensive SMEs

Spillovers through backward linkages and the export performance of business services. Evidence from a sample of Italian firms

What drives cross-border M&As in commercial banking?

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