Developing a multidimensional instrument to measure psychic distance stimuli

Douglas Dow and Amal Karunaratna
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Douglas Dow: Centre for the Practice of International Trade, Melbourne Business School, University of Melbourne, Carlton, Victoria, Australia
Amal Karunaratna: School of Commerce, The University of Adelaide, South Australia

Journal of International Business Studies, 2006, vol. 37, issue 5, 578-602

Abstract: This paper develops and tests a range of potential psychic distance stimuli including differences in culture, language, religion, education, and political systems. Using trade flows among a set of 38 nations as the dependent variable, it is shown that, whereas the majority of the proposed indicators prove to be statistically significant predictors of trade flows, the most common psychic distance surrogate – a composite measure of Hofstede's cultural dimensions – is not significant. Journal of International Business Studies (2006) 37, 578–602. doi:10.1057/palgrave.jibs.8400221

Date: 2006
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