Perceptions Versus National-Level Differences: A Mediating Model of Psychic Distance

Abstract

Originality and implications

This chapter is the first to empirically demonstrate the mediating relationship between exogenous national-level differences and perceptions of psychic distance, and thus, provides new insights into the debate over which measurement approach is more appropriate. Perceptions of psychic distance, even if measured by expert panels rather than the actual decision-makers, fully capture the impact of national-level differences on trade and FDI flows; however, if such measures of perceptions are not available, a simple selection of four national-level differences will still capture 80% of the same effect.

Citation

Dow, D., Håkanson, L. and Ambos, B. (2014), "Perceptions Versus National-Level Differences: A Mediating Model of Psychic Distance", Multinational Enterprises, Markets and Institutional Diversity (Progress in International Business Research, Vol. 9), Emerald Group Publishing Limited, pp. 133-170. https://doi.org/10.1108/S1745-886220140000009005

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