Managers’ psychic distance and its impact on Chinese FDI to Germany in the environmental industry

Abstract

Purpose

The purpose of this paper is twofold. First, to analyze the impact of Chinese managers’ psychic distance (PD) with Germany on their businesses; and second, to investigate whether managers’ previous experiences affect their PD.

Design/methodology/approach

A multiple case study research design is adopted. It is based on six Chinese companies that have recently entered Germany through FDI.

Findings

PD influences the decision making of Chinese FDI to Germany, it has an impact on Chinese businesses in Germany on 4 out of 12 dimensions, namely, legal, political, cultural aspects as well as language. Managers with no international experience (study, work, foreign investment practice) perceive a higher impact of PD dimensions on business with the host country, whereas the opposite is true for experienced ones.

Originality/value

While extensive research has been conducted on the PD construct under the point of view of the differences between the home and host country’s characteristics, this paper sheds lights on the impact of pre- and post- periods of investment, as well as over international experiences of managers investing abroad. It examines the environmental industry for Chinese FDI to Germany.

Citation

Vaccarini, K., Lattemann, C., Spigarelli, F. and Tavoletti, E. (2019), "Managers’ psychic distance and its impact on Chinese FDI to Germany in the environmental industry", International Journal of Emerging Markets, Vol. 14 No. 1, pp. 155-170. https://doi.org/10.1108/IJoEM-07-2017-0242