An Examination of the Causal Effect of Chinese Managers’ Perceptions of Institutional Distance on Foreign Location Choice: A Vignette Experiment

Abstract

Extant research has incorporated boundedly rational decision makers’ perceptions into the study of distance to explain location choice strategies. Yet, methodological impediments have given rise to questions on the validity of their findings, as those studies rely mainly on observational data and cross-sectional tests, i.e., measuring the decision-makers' perceptions ex post. Responding to these calls, we designed a unique vignette experiment to survey Chinese managers’ perceptions of the institutional environment in foreign markets in conjunction with and prior to a decision about a foreign location choice being made. Our study makes theoretical and methodological contributions to the foreign location choice and distance literature.