Journal of East European Management Studie (JEEMS) is published by IMR Press from Volume 30 Issue 1 (2025). Previous articles were published by another publisher under the CC-BY licence, and they are hosted by IMR Press on imrpress.com as a courtesy and upon agreement.
, Krzysztof Obloj 2, Marcus Hülsdau 31 Kozminski University, Department of Strategy
2 Kozminski University, Department of Strategy, and University of Warsaw
3 MSc, Data Scientist, MUUUH! Next
Abstract
The purpose of this study is to broaden our understanding of the post-entry effects of psychic distance by asking what markets - psychically close or distant - became over time the most strategically significant for European SMEs. Specifically, we analyse whether psychic distance is a valid predictor of the strategic significance of foreign market, as well as whether and how this relationship is moderated by export diversification. Contrary to expectations, the study findings reveal that psychic distance to the foreign market actually increases its post-entry strategic significance, providing support for the phenomenon of PD paradox.