Added Psychic Distance Stimuli and MNE Performance: Performance Effects of Added Cultural,Governance, Geographic,and Economic Distance in MNEs' International Expansion |
| |
| Institution: | 1. University of Memphis, Fogelman College of Business and Economics, Department of Management, Fogelman Executive Center 220, Memphis, TN 38152, United States;2. University of Memphis, Fogelman College of Business and Economics, Department of Management, Fogelman Executive Center 238, Memphis, TN 38152, United States;1. Department of Business Studies, Uppsala University, Box 513, 751 20 Uppsala, Sweden;2. Department of Business Administration, Public University of Navarre, Campus Arrosadía s/n, 31006 Pamplona, Navarre, Spain;1. Business School, Edge Hill University, Ormskirk, Lancashire, UK;2. Department of Strategy and International Business, Birmingham Business School, The University of Birmingham, Edgbaston, Birmingham, UK;3. Department of Marketing, Faculty of Business Studies, University of Vaasa, Wolffintie 34, FIN-65101 Vaasa, Finland;4. Faculty of Economics and Business Administration, University of Tartu, Narva Road 4, 51009 Tartu, Estonia;1. Indian Institute of Management, Prabandh Shikhar, Rau Pithampur Road, Indore, MP 453556, India;2. Indian Institute of Management, Prabandh Nagar, Sitapur, Lucknow, UP 226013, India;3. Discipline of International Business, University of Sydney, 21-25 Codrington St, Darlington, NSW 2006, Australia;4. Department of Management and Global Business, Rutgers Business School – Newark and New Brunswick, 1 Washington Park, Newark, NJ 07102, United States;1. John H. Sykes College of Business, The University of Tampa, 401 W. Kennedy Blvd.Tampa, FL 33606, United States;2. Newcastle University London, 102 Middlesex Street, London, E1 7EZ, UK |
| |
| Abstract: | 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 crucial insights about the degree of complexity and the associated performance effects. In particular, acknowledging that the underlying constructs vary across different PDS, we theorize and empirically demonstrate that different PDS have a significant effect on firm performance and, as a result, constitute distinct sources of complexity within firms' international expansion. Applying the CAGE-framework on a unique panel dataset of 91 German MNEs and relying on the concept of added distance, the results reveal that added governance, cultural, and geographic distances all have a negative effect on firm performance. In addition, added governance distance seems to explain the largest part of variation in firm performance, followed by added cultural distance. In conjunction with research on the relationship between perceived psychic distance and PDS, we are able to conclude that MNEs' awareness of PDS may constitute a major determinant of the performance effects. Thus, the effect on firm performance may depend on the degree to which MNEs are aware of inter-country differences and therefore proactively take measures to mitigate potential negative effects of added PDS on performance. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
