Central European Management Journal

Does Psychic Distance Still Matter? Empirical Evidence from Poland

Fonfara, Krzysztof Hauke-Lopes, Aleksandra Soniewicki, Marcin

Poznań University of Economics and Business

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Abstract

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.

Metadata

Journal Central European Management Journal 
Volume 29 
Issue 4 
Issue date 12/2021 
Type Article 
Language en
Pagination 32–56
DOI 10.7206/cemj.2658-0845.59
ISSN 2658-0845
eISSN 2658-2430