Improving on the Kogut and Singh metric of psychic distance

Abstract

Purpose

The purpose of this study is to examine the applicability of the Kogut and Singh index to the psychic distance scales of Dow and Karunaratna. This is in response to recent scholarly articles that have used the Kogut and Singh index in combination with the scales of Dow and Karunaratna in order to calculate composite psychic distance scores.

Design/methodology/approach

The paper reviews the literature on the measurement of psychic distance, in particular with regard to the empirical usage of the scales of Dow and Karunaratna. In addition, it develops a new approach to calculate aggregate psychic distance scores.

Findings

The findings indicate that the Kogut and Singh index is not appropriate to use in combination with the psychic distance scales of Dow and Karunaratna. The paper proposes an alternative methodology for calculating aggregate psychic distance scores which involves standardizing the raw scores of the psychic distance dimensions of Dow and Karunaratna and establishing summated scales.

Originality/value

The study contributes to the literature by proposing an alternative methodology for the psychic distance scales of Dow and Karunaratna rather than the Kogut and Singh index. In light of the prominence of these two influential and widely-cited articles, this commentary challenges the notion of calculating psychic distance.

Citation

Gerschewski, S. (2013), "Improving on the Kogut and Singh metric of psychic distance", Multinational Business Review, Vol. 21 No. 3, pp. 257-268. https://doi.org/10.1108/MBR-04-2013-0019