On the influence of cultural intelligence on psychic distance in buyer – seller relationship: a study of foreign exporters and their import buyers in an emerging economy

Abstract

Purpose – Since managerial decisions are often bounded by rationality, managers use their cognitive capabilities and social interaction to manage their operational cultural and environmental differences. From the resource-advantage theory perspective, this study postulates that import managers’ cultural intelligence (CQ) is an intangible but valuable resource capable of reducing the effect of their foreign counterpart’s psychic distance and ultimately, their relational and financial performance. Design/methodology/approach – The measure of CQ in this study comprises metacognitive and motivational CQs to examine the relationship between metacognitive and motivational CQs on psychic distance and its ultimate effect on relational and financial performance. Survey data collected from 228 Nigerian Automobile Retail import managers and a dyadic data of 41 corresponding export counterparts were analysed using structural equation modelling (SEM) and multiple regression analysis to test the proposed conceptual framework. Findings – The findings revealed that metacognitive CQ reduces the effect of psychic distance in the exchange relationship. Moreover, in the presence of a low-level psychic distance, relational performance increases. This finding confirms the intervening role of CQ on performance relationship. The study offers insights into the under-researched area of CQ in international marketing. It highlights the role of CQ and its influence on psychic distance in the success or failure of relational exchanges in the international market. Originality/value – The study presents cultural intelligence as a human resource advantage that has the potential to improve managerial relational and financial performance. The research goes further to advance the theoretical understanding of the concept’s significance and application in international buyer-seller exchanges and also provides valuable guidelines for import organisations in their recruitment and training of potential managers. Keywords: Psychic distance, cultural intelligence, human resource advantage, relational performance, financial performance, international buyer-seller relationship.