Institutional distance and location choice: an experimental approach to the perception puzzle

Azar, Goudarz, Batsakis, Georgios, Drogendijk, Rian, PakSeresht, Ashkan and Geng, Ruoqi ORCID: https://orcid.org/0000-0001-8183-7379 2024. Institutional distance and location choice: an experimental approach to the perception puzzle. International Marketing Review 41 (3/4) , pp. 717-744. 10.1108/IMR-12-2022-0282

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Abstract

In this research, we designed and implemented a unique vignette experiment to study the effect of managers’ perceptions of institutional distance on foreign location choice, as well as the moderating effect of managerial international experience and preferred entry mode on this relationship. We employ an experimental vignette methodology (EVM) approach applied in the context of Chinese managers to test the causal relationships depicted in our hypotheses. In this way, we measure the decision-makers' perceptions ex ante, i.e., in conjunction with and prior to a decision about a foreign location choice. Our findings show that managers’ ex-ante perceptions of institutional distance negatively affect decisions on foreign location choice. Also, we find that managerial international experience and preference for high commitment entry modes mitigate the negative effect of managers’ perceptions of institutional distance on foreign location choice. This research study adds to our understanding of the effect of managers’ perceptions of institutional distance and managerial contingencies on foreign location decisions. Further, it advances novel experimental design in international business research in general and on foreign location choice in particular.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Emerald
ISSN:	0265-1335
Date of First Compliant Deposit:	17 May 2024
Date of Acceptance:	17 April 2024
Last Modified:	08 Nov 2024 17:00
URI:	https://orca.cardiff.ac.uk/id/eprint/168697

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