¹Department of Management & Marketing, Hong Kong Polytechnic University, Kowloon, Hong Kong

Correspondence: PD Ellis, Department of Management & Marketing, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong. Tel: +852 2766 7108; Fax: +852 2765 0611; E-mail: mspaul@polyu.edu.hk

Received 17 May 2005; Revised 3 July 2007; Accepted 23 August 2007; Published online 21 February 2008.

Abstract

An analysis of 924 foreign market entries made by a sample of Chinese exporters reveals that psychic distance moderates the relationship between foreign market size and entry sequence. In doing so, this study challenges the extant hypothesis that the establishment of foreign operations conforms to a simple pattern of increasing psychic distance to markets. The findings also reveal that psychic distance is asymmetrical in nature, and that assessments made by sellers and their buyers are inherently inequivalent.