So Far, Yet So Close. : An Examination of the Impact of Psychic Distance on Online Purchasing Behaviors of Consumers from five Countries

Sammanfattning: The phenomenon of psychic distance has been thoroughly researched regarding its influence on the internationalization patterns of firms into foreign markets. Psychic distance has been determined by a plethora of existing literature as an inhibitor to trade; however, much of this research only takes on the perspective of the firm. The construct of psychic distance has primarily been examined on the supply side, while a lack of literature exists examining the impact of psychic distance from the consumer’s perspective. Furthermore, the academic world has devoted little attention to applying the psychic distance construct to e-commerce, especially in terms of retail. Due to the continuously rising significance of e-commerce, especially in terms of cross-border retail, understanding the way in which consumers perceive foreign international online vendors (IOVs) is essential to business success. This thesis contributes to the existing research regarding psychic distance, by seeking to answer the following research questions: "How do varying levels of perceived psychic distance impact the online purchasing behaviors of consumers?" and "How does the impact of perceived psychic distance on purchasing behaviors vary based on consumer’s nationality?". To answer these questions, empirical data is collected through the conduct of five focus groups of varying nationalities, each either containing consumers of French, German, Swedish, Russian or Chinese nationality. The analysis of empirical data is built upon a theoretical foundation using the conceptualization of distance defined by Dow & Karunaratna (2006), consumer nationality and retailer country of origin (COO). The findings of this thesis conclude that perceived psychic distance likely has somewhat of an influence on consumer online purchasing behaviors. However, factors such as development level of retailer COO, retailer COO familiarity, development level of consumer nationality, and consumer ethnocentrism have more measurable impacts on the purchasing behaviors of consumers in the online retail context.