Abstract

Purpose: The purpose of the article is to discuss the multidimensionality of the
distance construct and to provide a critical overview of the existing research on
distance and its significance for the internationalization process.

Methodology: The review of relevant literature, based on databases such as EBSCO,
Elsevier, JSTOR and ProQuest, covered empirical papers (keyword: “distance”
included in the title or abstract) investigating the relationship between the distance
and key issues in the companies’ internationalization. The presentation of results
was structured along five key dimensions of distance: geographic, economic, institutional,
cultural and psychic. The first four dimensions are antecedents to psychic
distance, which itself relates to the managerial perception of differences between the
countries.

Findings: The development of new forms of transportation and communication technologies, together with the increasing economic integration, have made many authors
and managers believe that distance is no longer relevant to the companies’
internationalization process. However, the empirical studies do not confirm this claim.

Research implications: The multidimensionality of distance and inconsistencies
in the body of research concerning the cultural dimension of distance create new
research challenges. The present article provides recommendations for the scholars
interested in the role of distance in international business.

Originality: The article presents an extensive literature review, explicitly indicating
the role of different dimensions of distance in key internationalization issues,
i.e. motives, market selection, mode of entry, level of local responsiveness and global
integration. It makes a clear distinction between psychic distance and country-level
distance.

Keywords