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Psychic Distance and FDI: The Case of China

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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).

This paper has been previously published in the Journal of Comparative International Management: Vaccarini, K. (2015), “Psychic distance and FDI: The case of China ,” Journal of Comparative International Management, Vol. 18, No. 1, pp. 1–23. Reprinted with permission from the Journal of Comparative International Management.

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Authors and Affiliations

  1. Free University of Bozen-Bolzano, Bolzano, Italy

    Katiuscia Vaccarini

  2. University of Macerata, Macerata, Italy

    Francesca Spigarelli

  3. University of Macerata, Macerata, Italy

    Ernesto Tavoletti

  4. Jacobs University, Bremen, Germany

    Christoph Lattemann

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  1. Katiuscia Vaccarini
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  2. Francesca Spigarelli
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  3. Ernesto Tavoletti
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  4. Christoph Lattemann
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Correspondence to Katiuscia Vaccarini .

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Vaccarini, K., Spigarelli, F., Tavoletti, E., Lattemann, C. (2017). Psychic Distance and FDI: The Case of China. In: Cultural Distance in International Ventures. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62193-7_2

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