Psychic distance effects for Russian market: Estonian and western experience
Purpose ‐ This paper is aimed at providing the theoretical basis and some empirical implications concerning the effect of the psychological (or "psychic") distance on the enterprise internationalisation process. The main goal is to examine distance components and their
dynamics with the focus on the Russian Federation market. Design/methodology/approach ‐ The qualitative analysis is based on the range of theoretical and empirical studies focused on expanding of Estonian and foreign enterprises to the Russian Federation market as well as Russian
market attractiveness and risk assessment. Findings ‐ According to the analysis conducted in the study, the slightly diminishing psychic distance effect between Baltic states and the Russian Federation, as well as the gateway effect could be identified. Uncertainty and discrepancies
with the western business techniques are found to be the factors of significant influence. Research limitations/implications ‐ Further research of the subject can be dedicated to the distance components estimation through factor or component analysis on the base of macroeconomic
data and the data obtained from the questionnaires of selected enterprises. Practical implications ‐ Research of the current topic can provide a solid basis for the management strategies interpretation and development in the context of the vulnerability of the Russian Federation
market with the goal of establishing effective business operations. Originality/value ‐ This paper provides a basis for future research and emphasizes the role of the given phenomenon in strategic management.