Revisiting the psychic distance paradox: international retailing in China in the long run (1840–2005)

Haiming Hang, Andrew Godley

Research output: Contribution to journalArticlepeer-review

19 Citations (Scopus)

Abstract

This paper uses original research on the roles played by two sets of foreign entrants into Chinese retailing since the 1850s – the overseas Chinese entrants and western entrants – to explore the psychic distance paradox over the long run. It explains how the advantages of psychic closeness in Chinese retailing have always been important in reducing entry barriers, but that the rising costs of technology have increased the significance of firm proprietary strengths in some formats, notably supermarkets, so reducing the relative importance of psychic closeness. The paper therefore illustrates how taking the long-term perspective enables more sophisticated conclusions to emerge. A cross-sectional analysis of one sector – Chinese supermarkets – would confirm the psychic distance paradox; overseas Chinese have been unable to translate psychic closeness into superior performance. By contrast their historic performance in department stores and more recently in fashion chains has been superior to the format leaders. This long-term perspective therefore suggests that the understanding of the psychic distance paradox needs to be moderated by additional conceptualisation.
Original languageEnglish
Pages (from-to)383-400
Number of pages18
JournalBusiness History
Volume51
Issue number3
DOIs
Publication statusPublished - May 2009

Fingerprint Dive into the research topics of 'Revisiting the psychic distance paradox: international retailing in China in the long run (1840–2005)'. Together they form a unique fingerprint.

Cite this