Psychic Distance and Cross - Border Cooperation of Smes: An Empirical Study On Saxon and Czech Entrepreneurs' Interest in Cooperazion

Zusammenfassung

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This paper examines the relationship between the psychic distance of decision makers in SMEs from specific foreign markets and their interest in cooperation with companies from those countries. Based on a review of the literature and a qualitative empirical study among entrepreneurs in the Saxon-Czech border area, the paper identifies the central explanatory variables of psychic distance, thus contributing to a theoretically-based conceptualization of this construct. Previous conceptualizations of psychic distance are extended and specified. This reveals the necessity for a wider inclusion of perceived differences in the political and legal situations, the mind-set as well as the historical development.

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Auszug

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Psychic Distance and Cross - Border Cooperation of Smes: An Empirical Study On Saxon and Czech Entrepreneurs' Interest in Cooperazion

1. Introduction

Being involved in cross-border corporate activities has been increasingly typical for small and medium-sized companies since the 1980s (Larimo 2003; Lamb/liesch 2003). As the expenditure is manageable, cooperation is particularly recommended as a suitable internationalization strategy for small and medium-sized companies, which normally possess only limited resources (Haussmann 1997; Müschen 1998). Possible benefits include the facilitation or acceleration of the opening-up of markets, cost savings and a better access to know-how (Buhner 1991). Small and medium-sized companies often choose their potential cooperation partner in the neighbouring country because of their geographical proximity and regional bonds. This results in active cooperation particularly in regions close to a border.

The relevant literature on the internationalization of small and medium-sized companies comprises a large number of works which focus on the selection of a suitable cooperation partner (Bleicher 1992; Börsig/Baumgarten 1997; Binder/Lux 1997). Functional reasons and strategic limits aside, the preselection of suitable cooperation partners includes in particular the specific attitudes of the management as an important part. This disposition is based on empathy with, or aversion to, certain countries, e.g. as a result of negative experience (Köhler/Hüttemann 1989; Berndt/Altobelli/Sander 2005). There is subjective influence on the decision-making process particularly for small and medium-sized companies with the entrepreneur's personality playing a central role (Dichtl et al. 1983; McGaughey et al. 1997). According to his or her limited rationality (March/Simon 1976), the extension of the corporate activity across borders takes place with preference to some markets while neglecting other objectively comparable countries (Kornmeier 2002).

Works on psychic distance discuss the importance of the entrepreneur's personal attitudes towards a foreign market in the course of reaching a decision on internationalization. This construct can contribute to the explanation of the individuar s socio-cultural preference for certain markets and i...

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