Title: Order of entry into foreign countries by US multinationals since 1965: role of psychic distance over time and across sectors

Authors: Suresh Singh

Addresses: Department of Management and Marketing, College of Business and Management, Northeastern Illinois University, 5500 N. Saint Louis Avenue, Chicago, Illinois 60625, USA

Abstract: Observations of internationalising manufacturing firms, in the late 70s, revealed that the order in which firms enter foreign countries is influenced by psychic distance (perceived closeness based on factors such as culture, language and development level). Since then, the world has undergone rapid globalisation and services have replaced manufacturing as the dominant sector of the world economy. To ascertain whether: a) psychic distance is still relevant; b) industry sector impacts the relationship between psychic distance and order of entry, this paper analysed the order of entry into foreign countries by US multinationals in manufacturing and services sectors since 1965. Results indicate that cultural and language differences still play a role and the effect is very similar across sectors.

Keywords: order of entry; psychic distance; globalisation; manufacturing industry; services; process modelling; cultural distance; international entry; foreign direct investment; FDI; multinationals; market entry; multinational corporations; MNCs; culture; cultural differences; language differences; development level; service industry.

DOI: 10.1504/IJBG.2015.071165

International Journal of Business and Globalisation, 2015 Vol.15 No.2, pp.171 - 192

Received: 03 Mar 2015
Accepted: 22 Mar 2015

Published online: 13 Aug 2015 *

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