Competitive Session Factors Moderating the Impact of Psychic Distance: Empirical Tests on Bi-Lateral Trade Flows

This paper is the second in a series developing and testing a new set of multidimensional scales for measuring psychic distance. In addition to the traditional measure of culture, these scales include differences in language, religion, education levels and political ideologies. The scales are tested for their predictive power on bilateral trade flows across broad set of industries and countries. This model is then used as a benchmark for testing three sets of moderating hypotheses