Douglas Dow

Markets and Networks in International Trade: On the Role of Distances in Globalization

Lars Häkanson et al. — Thu, 02 Feb 2012 18:19:35 PST

• The enduring importance of geographic distance as an impediment to international trade has recently become recognized as an em¬pirical fact in need of explanation. According to one line of argument – the ‘network view’ – the continuing high sensitivity of international trade to geographical distance is associated with a shift in the composition of trade towards goods requiring more extensive infor¬mation exchange and personal interaction between buyers and sellers. An alternative explanation – ‘the market view’ – contends that improved availability of infor¬ma-tion and increasing transparency of markets have facilitated the matching of geographically more prox¬imate buyers and sellers and the observed decline in average transportation distances is a reflection of increasingly efficient markets.

• This paper examines empirically the relative merits of these two arguments based on a longitudinal analysis of bilateral trade between 25 major trading nations for the period 1962-2008. It compares the development of the relative importance of ‘psychic distance’ – a proxy for infor¬mation related transaction costs – and geographic distance – a proxy for transportation costs – in three catego¬ries of goods.

• The results are broadly in support of the ‘market-view’, showing that the sensitivity of trade to psychic distance has declined dramatically for all categories of goods. The impact of geographic distance has increased markedly for homogenous goods, whereas for more differentiated goods it has decreased mildly.

Disentangling the Roles of International Experience and Distance in Establishment Mode Choice

Douglas Dow et al. — Thu, 17 Feb 2011 21:10:56 PST

The empirical results concerning the role of international experience in establishment mode choice decisions have, until now, been ambiguous and mixed. In an attempt to resolve this dilemma, experiential knowledge in an international setting is decomposed into two distinct dimensions and a more comprehensive set of distance measures are incorporated into the models predicting the establishment modes of Nordic FDI.

The empirical results indicate that the two forms of experiential knowledge (cluster-specific experiential knowledge and general internationalization knowledge) are both significantly related to establishment mode choice, but in opposite directions.

The results for this data set also show that when used to predict establishment mode choice, the broader range of distance measures explain 2.6 times as much variance as the Hofstede-based Kogut and Singh index.

Moreover, the results demonstrate that not fully controlling for this broader range of distance measures significantly distorts the relationship between cluster-specific experiential knowledge and establishment mode. It appears there may be a similar type of distortion with respect to general internationalization knowledge but the effect size is much weaker and non-significant within this sample.

Post Entry Advancement of International Service Firms in Australia: A Longitudinal Approach

Abhishek Shukla et al. — Thu, 07 Jan 2010 14:17:37 PST

More Than Just National Cultural Distance: Testing New Distance Scales on FDI in Slovakia

Douglas Dow et al. — Tue, 05 Jan 2010 16:29:24 PST

Over the past decade, numerous calls have been made within the international business literature for a broader conceptualization and measurement of non-geographic forms distance amongst countries. One promising response to this call has been a set of psychic distance stimuli scales put forward by Dow, D., & Karunaratna, A. (2006). Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies, 37(5), 575–577. However, to date, these new scales have only been tested in one very limited setting – predicting bi-lateral trade flows. This paper extends the generalizability of the Dow and Karunaratna scales by testing their criterion-related validity with respect to three specific foreign direct investment (FDI) issues: predicting market selection, entry mode choice and performance. The results indicate that the Dow and Karunaratna scales are significantly stronger predictors of market selection and FDI performance than the traditional Kogut and Singh index; and that researchers should go beyond using national cultural distance as their sole measure of distance amongst countries. The results for predicting entry mode choice are more ambiguous; however, the authors argue that the ambiguity may reflect the inadequacies of the classic TCE-based approach to predicting entry mode, rather than shortcomings in the measurement of the distance construct.

Factors Influencing Perceptions of Psychic Distance

Douglas Dow — Tue, 10 Nov 2009 19:01:49 PST

Challenging the Conceptualization and Measurement of Distance and International Experience in Entry Mode Choice Research

Douglas Dow et al. — Sun, 17 May 2009 17:58:04 PDT

Although international entry mode choice has been extensively studied, the empirical results regarding two key antecedents—various forms of distance and international experience—have been equivocal. The authors argue that the conceptualization and measurement of these variables may be contributing to the ambiguous results. They demonstrate that a broader conceptualization of the underlying factors driving the distance construct substantially increases the ability to predict entry mode. Furthermore, when a refined interpretation of international experience is employed, only experience in similar countries affects entry mode selection. Experience in dissimilar countries seems to have no predictive power. These results call for a radical change in how these two key constructs should be operationalized in further entry mode research.

Factors Influencing Managerial Perceptions of Psychic Distance

Douglas Dow — Tue, 13 Jan 2009 16:29:06 PST

Psychic Distance, International Experience and Establishment Mode

Douglas Dow et al. — Mon, 16 Jun 2008 16:37:38 PDT

Factors Moderating the Impact of Psychic Distance: Empirical Tests on Bi-Lateral Trade Flows

Douglas Dow — Tue, 27 Nov 2007 17:38:32 PST

Do Born Global Firms Represent a Truly Distinct Type of Organisation?

Douglas Dow — Tue, 27 Nov 2007 17:35:49 PST

The Measurement and Impact of Psychic Distance: Testing New Scales on FDI in Slovakia

Douglas Dow et al. — Tue, 27 Nov 2007 17:33:17 PST

Entry Mode Choice: Testing New Approaches to Measuring Psychic Distance and International Experience

Douglas Dow et al. — Tue, 27 Nov 2007 17:29:25 PST

Refining and Extending a Multidimensional Model of Psychic Distance Stimuli: Further Empirical Tests on Bi-Lateral Tradeflows

Douglas Dow — Tue, 27 Nov 2007 17:24:03 PST

The Impact of ISO 9000 Certification on Customer Satisfaction

Mile Terziovski et al. — Tue, 27 Nov 2007 17:19:33 PST

A Field Experiment on the Effects of Benchmarking and Goal Setting on Company Sales Performance

Leon Mann et al. — Tue, 27 Nov 2007 17:17:03 PST

The Business Value of Quality Management Systems Certification

Mile Terziovski et al. — Tue, 27 Nov 2007 17:13:56 PST

Exploding the Myth: Do All Quality Management Practices Contribute to Superior Quality Performance?

Douglas Dow et al. — Tue, 27 Nov 2007 17:10:40 PST

The Adaptation of Host Market Positioning Strategies: Empirical Evidence on Australian Exporters

Douglas Dow — Mon, 08 Oct 2007 18:17:25 PDT

A Note on Psychological Distance and Export Market Selection

Douglas Dow — Mon, 08 Oct 2007 18:14:57 PDT

Adaptation and Performance in Foreign Markets: Evidence of Systematic Under-adaptation

Douglas Dow — Mon, 08 Oct 2007 18:10:59 PDT