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Psychic Distance and FDI: The Case of China

  • Katiuscia VaccariniEmail author
  • Francesca Spigarelli
  • Ernesto Tavoletti
  • Christoph Lattemann
Chapter
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Abstract

This chapter seeks to investigate whether and to what extent Psychic Distance (PD) is considered by scholars as a specific determinant of inbound and outbound foreign direct investments (FDIs) in China. The key finding of the study is that psychic distance as a determinant influencing FDI seems to be under-investigated. This chapter also aims to systematize the limited and fragmented literature about non-tangible perceptions of “distance” between home and host economies and contributes to raising awareness on the concept of psychic distance. It provides useful insights and practical implications for various interest groups such as international business scholars (a more comprehensive review and systematization of the concept of psychic distance), managers (awareness raising on psychic distance, opportunities and challenges in the IB scenario, and setting up and strengthening long-term cooperation between Europe and China), and policy makers (investment flows between Europe and China and key barriers which affect companies and require action politically and institutionally to ensure that opportunities are fully exploited by companies).

Keywords

PD Psychic distance Cultural distance Determinant FDI China Managers’ perceptions International business Uppsala OLI OLMA LLL Hofstede Cross Cultural Cross-country Cross border Psychic distance dimensions Geographical distance Level of education Level of economic development Level of technological development Political system Legal system Regulations Accepted business practices Business ethics 

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Katiuscia Vaccarini
    • 1
    Email author
  • Francesca Spigarelli
    • 2
  • Ernesto Tavoletti
    • 3
  • Christoph Lattemann
    • 4
  1. 1.Free University of Bozen-BolzanoBolzanoItaly
  2. 2.University of MacerataMacerataItaly
  3. 3.University of MacerataMacerataItaly
  4. 4.Jacobs UniversityBremenGermany

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