Strategy Cluster Seminar: Professor Douglas Dow
Over the past few years, the role that ‘distance’ has played in International Business (IB) research has changed substantially. Up to and including most of the past decade, ‘distance’ in its various forms has been used almost exclusively as predictor or control variable in IB research. However, in belated response to Shenkar’s 2001 critique of the distance literature, a new stream of literature is now emerging. This literature emphasizes the importance of individual-level perceptions of distance, and has begun to investigate the antecedents of those perceptions. This paper builds on that literature. In the first part of the paper we present an analysis of a survey sample dominated by individuals who have low levels of international experience. Their perceptions of distance are driven almost exclusively by geographic distance and differences in industrial development. However, for the identical survey administered to a sample dominated by individuals with high levels of international experience, the importance of geographic distance as an antecedent declines by roughly 60%, and more subtle dimensions such as differences in languages and religion become substantially more important. This sets up the second part of the paper, where we propose that this phenomena is driven by a concept known as cognitive complexity. The research agenda we propose involves a more structured assessment of an individual’s level of cognitive complexity with respect to psychic distance to confirm the link between international experience and cognitive complexity. Paired with this, we also conduct an on-line experiment concerning a fictitious firm selecting its entry mode into a foreign market. This later stage is to demonstrate the link between the participant’s perceptions of distance and a simulated management decision, and to show the potential moderating role of cognitive complexity.