Psychic distance and inter-organizational relationships: theoretical foundations, methodological approaches, and future research directions

Abstract

Purpose: This paper presents a comprehensive and integrated review of the literature on the role of psychic distance in shaping inter-organizational relationships, by uncovering the theoretical, methodological, and thematic foundations of this research domain.

Design/methodology/approach: Leveraging a systematic literature review in combination of text mining techniques using Leximancer, the study identified 62 relevant articles published between 1980 and 2024. The analysis revealed four key areas of focus: (1) interfirm business relationships, (2) relational governance and performance, (3) relationship quality, and (4) relationship violation.

Findings: The findings indicate that this body of research is grounded in well-established theoretical frameworks, with social exchange theory, transaction cost analysis, relational exchange theory, and the resource-based view being the most frequently employed. The literature predominantly emphasizes the role of psychic distance in the formation and maintenance of interfirm business relationships, while the other three areas remain comparatively underexplored.

Originality/value: By offering a more robust framework and a holistic understanding of psychic distance in inter-organizational relationships context, this study paves the way for further theory-driven studies, which is a theoretical contribution towards advancing this research area