TY - JOUR
T1 - Revisiting the psychic distance paradox
T2 - international retailing in China in the long run (1840–2005)
AU - Hang, Haiming
AU - Godley, Andrew
PY - 2009/5
Y1 - 2009/5
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=74549192057&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1080/00076790902843940
U2 - 10.1080/00076790902843940
DO - 10.1080/00076790902843940
M3 - Article
SN - 0007-6791
VL - 51
SP - 383
EP - 400
JO - Business History
JF - Business History
IS - 3
ER -