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The purpose of this paper is to respond to Hennart’s (2014) challenge to the existing born global literature. In his challenge, Hennart proposes a simpler explanation of why some firms internationalize earlier and more aggressively than others. However, such a parsimonious model of born global firms raises the awkward question of whether born global firms are indeed any different from firms that internationalize more gradually.

Using two extensive surveys of Australian exporters, this paper first explores the degree to which a set of six “facilitating factors” that Hennart puts forward are different across born global and non-born global firms. Next, it tests the second aspect of the debate highlighted above – i.e. whether born global firms behave differently from non-born global firms. This is done by testing for differences in the patterns of early market selection for born global and non-born global firms.

Support is found for both the role of facilitating factors and for the view that born global firms behave differently from non-born global firms. As a result, it is proposed that the Hennart and the RBV-oriented explanations of born global firms need to be viewed as complementary, rather than competing. Each may represent a necessary but not sufficient condition with respect to born global firms.

A systematic testing for differences in facilitating factors and market selection patterns across born global and non-born global firms are both issues that have major implications for the born global literature, and yet have been left largely unexplored to date.

This study aims to explore the intention–action relationship of small and medium-sized (SMEs) firms with knowledge capital that declare their intention to internationalize from their inception.

The authors apply the theory of planned behavior and hand-collect a database of Chinese born globals, purely domestic firms and traditional exporting firms. The authors’ hypothesis is that Chinese born globals [or young aspiring globals (YAGs)] will strive to acquire domestic and international patents at an early stage to institutionally protect their knowledge-capital via intellectual property rights as they enter the competitive global marketplace.

The results confirm that knowledge-focused YAGs apply for patents at an earlier stage than purely domestic and traditional exporting firms. However, in the long run, these firms are neither demonstrating increased knowledge capital by being more innovative nor producing more valuable innovations than their counterparts.

This study tests the intention–action relationship in the context of SMEs internationalization. It contributes to the internationalization literature by identifying the internationalization pattern of born globals (YAGs) from emerging markets and providing an explanation for what happens to these firms as they mature.

The purpose of this study is to examine the applicability of the Kogut and Singh index to the psychic distance scales of Dow and Karunaratna. This is in response to recent scholarly articles that have used the Kogut and Singh index in combination with the scales of Dow and Karunaratna in order to calculate composite psychic distance scores.

The paper reviews the literature on the measurement of psychic distance, in particular with regard to the empirical usage of the scales of Dow and Karunaratna. In addition, it develops a new approach to calculate aggregate psychic distance scores.

The findings indicate that the Kogut and Singh index is not appropriate to use in combination with the psychic distance scales of Dow and Karunaratna. The paper proposes an alternative methodology for calculating aggregate psychic distance scores which involves standardizing the raw scores of the psychic distance dimensions of Dow and Karunaratna and establishing summated scales.

The study contributes to the literature by proposing an alternative methodology for the psychic distance scales of Dow and Karunaratna rather than the Kogut and Singh index. In light of the prominence of these two influential and widely-cited articles, this commentary challenges the notion of calculating psychic distance.

In this chapter we test a conceptual model to shed light on the psychic distance (PD) hazards in cross-border acquisitions’ (CBAs’) performance. Only a few studies have sought to examine the impact of national-level dimensions on CBAs’ performance, such as cultural distance or PD, with non-conclusive and contradictory results. Event study methodology is used to scrutinize the impact of the five key dimensions of psychic distance stimuli (PDS) on the stock market performance of the US acquirer firms and 26 countries involved in the CBA. Our results support that PD, as a whole, has a negative impact on CBAs’ performance although only in the short term there is a statistically significant negative impact, whereas in the long term no effect is statistically significant. Analyzing the different dimensions of PDS, only differences in language, education, and political systems are significant. This chapter is the first to empirically examine the PD hazards on CBAs by breaking down the PDS and test the effect of each dimension on CBAs´ performance. The findings of this study may be useful for managers of firms that wish to undertake CBAs as it denotes important dimensions which hinder post-deal performance.

In this chapter I argue that the distance research in international business studies is at a turning point, not in terms of its popularity, nor the quantity of articles published, but rather, in terms of the types of issues that are explored. Past distance research has largely been conducted at the level of the firm and/or the market – that is, linking national-level measures of distance with specific firm behaviors and outcomes. However, the seminal paper by Shenkar (2001) represents a shift in focus that is only just beginning to gain traction. This shift involves stepping back and beginning to unpack the black box we call ‘distance’ by exploring the micro-level mechanisms involved. In essence, it is about digging deeper in multiple aspects, to understand when, why and how distance matters in the international business (IB) context. These are issues that until now have typically been neglected. A metaphor borrowed from the social psychology literature, known as Coleman’s Boat, is used as a vehicle to explain the key issues involved in this shift and the opportunities for future research.

This chapter bridges the gap between two distinct approaches to the concept of psychic distance – measuring it in terms of people’s perceptions of distance or in terms of exogenous national-level differences. The two approaches are reconciled in a “refined and integrative” definition of the concept, which is tested empirically using a mediating model.

Structural equation modeling is used on a bilateral sample of 25 countries to test whether perceptions of psychic distance mediate the relationships between national-level differences and bilateral trade and investment.

By testing for alternative direct paths, the chapter confirms that for the main forms of national-level differences, culture, socioeconomic development, language, and religion, psychic distance fully mediates their relationships with both trade flows and investment patterns. However, for geographic distance, while the relationship is fully mediated for investment, it is only partially mediated for exports. Two asymmetric “distance-bridging” factors are also found to be significant antecedents of psychic distance.

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.

This paper has two overall goals. The first is to serve as a broad overview of the literature on the subject theme, with three main objectives in mind: to highlight the complexities of international market selection or segmentation as a field of study and as a strategic decision by international firms; to explore the various ways and perspectives from which this area has been studied; and to suggest areas for future research by drawing on the preceding discussion. The second goal of the paper is to act as an introduction to the IMR special issue on the title theme, by outlining the special issue's objectives and the contributions to it.

Drawing on the relevant literatures, the paper begins by outlining the factors that make the field complex in both theoretical and applied terms, moves to consider the research streams that comprise its main components, and concludes by drawing conclusions and implications for future research.

A large part of the complexity characterizing this field arises from the fact that it is closely intertwined with the broader area of internationalization and a number of other decisions related to it, such as the “go/no‐go” decision and the firm's choice of mode of entry. From the research perspective, theory development has been impeded by a high degree of fragmentation, which has resulted in various different streams studying the same general issues from widely different perspectives.

The paper identifies a large number of directions for potential future research, not the least of which is the need for integrative research that addresses the fragmentation identified in the study.

Although this is primarily a theoretical paper directed at researchers, practitioners can gain useful insights from it by examining the various factors that have a bearing on their internationalization decisions.

The objectives of the main part of the paper will have been met if it succeeds in stimulating interest in further research and discussion on the core issues. The second part summarizes the contributions to the special issue and draws attention to the main message that each aims to convey.

The 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.

This 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.

Findings 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.

This 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.

This 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.