Psychic Distance, its Impact and Coping Modes: Interpretations of SME Decision Makers

This paper adopts an interpretative focus in addressing SME decision makers' perceptions of psychic distance. It draws on empirical evidence from British SMEs exporting to Brazil. The study also addresses the hitherto neglected question of how SMEs cope with the difficulties of engaging in international business with psychically distant countries. It discusses the implications of its cognitive approach and findings for further research and conceptual development. Results indicate the relevance of a broad-based multi-dimensional interpretation of psychic distance. Distance dimensions also have a differential impact on doing business with Brazil, although a strong socio-institutional cluster appears. Further exploration of the understandings that SME decision-makers have of psychic distance-related impacts and the possibilities of coping with these, illustrate how they attempt to bridge psychic distance features or adopt avoidance measures.