Distance is an important concept for the study of international location decisions, but conflicting empirical results call for the investigation of when distance matters. Based on institutional distance, this conceptual paper proposes that the general preference for less distant countries is lower when: the company is state owned; internationalization motives are asset, resource, or efficiency seeking rather than market seeking; and internationalization occurs after globalization and the advent of new technologies. Conflicting results may be a consequence of studies mixing these circumstances without properly controlling for them. As circumstances under which distance matters the least are typical of companies from Latin America, distance should be less important for these companies.
Financed by the National Centre for Research and Development under grant No. SP/I/1/77065/10 by the strategic scientific research and experimental development program:
SYNAT - “Interdisciplinary System for Interactive Scientific and Scientific-Technical Information”.