Geographical closeness to a foreign market may not necessarily translate into real or perceived closeness to the foreign customers and the concept of psychological distance needs to be understood.

Question

Quizplus · Accepted Answer

While geographical proximity can be a factor in determining psychological closeness to a foreign market, other factors such as cultural differences, language barriers, and political factors can also affect how close or distant a company may feel to its foreign customers. Therefore, the concept of psychological distance is important to understand when entering into foreign markets.

Geographical Closeness to a Foreign Market May Not Necessarily Translate