Asia Pacific Journal of Management

, Volume 36, Issue 1, pp 135–160 | Cite as

Interactive impact of ethnic distance and cultural familiarity on the perceived effects of free trade agreements

  • Russel KingshottEmail author
  • Piyush Sharma
  • Peter Hosie
  • Nebojsa Davcik


Past research on free trade agreements (FTAs) mostly uses an economic perspective to assess their impact on the level of trade and investments between nations. As a result, there is a distinct paucity of research on the perceptions of employees and managers in organizations affected by FTAs, towards the likely outcomes of those FTAs. We address this gap by using the context of recently signed China-Australia free trade agreement (ChAFTA) to develop a multidimensional scale for the perceived advantages and disadvantages of FTAs. Drawing on social identity theory and the similarly-attraction paradigm we also show direct and interactive effects of perceived ethnic distance (between home and partner country) and cultural familiarity (with the FTA partner country) on these perceived outcomes of FTAs. Our findings highlight the need to look beyond the economic perspective and consider a much broader range of perceived outcomes of FTAs.


Advantages Cultural familiarity Disadvantages Employees Ethnic distance Free trade agreement FTA 


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Russel Kingshott
    • 1
    Email author
  • Piyush Sharma
    • 1
  • Peter Hosie
    • 2
  • Nebojsa Davcik
    • 3
  1. 1.School of Marketing Curtin Business SchoolCurtin UniversityBentleyAustralia
  2. 2.Central Queensland University AustraliaPerthAustralia
  3. 3.Instituto Universitario de Lisboa (ISCTE – IUL)LisbonPortugal

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