Overcoming soft barriers to global trade

• Published date: 01 July 2019
• Author: Mary B. Teagarden
• Date: 01 July 2019
• DOI: http://doi.org/10.1002/tie.22071

LETTER FROM THE EDITOR

Overcoming soft barriers to global trade

To state the obvious, global trade, also known as international eco-

nomic integration, is under attack. International businesses

increasingly encounter strong local opposition to this neoliberalism

orientation, undergirded by values of untrammeled free trade and

a reduction of regulation. International businesses' actions and

activities are often seen as threatening the natural environment,

ignoring workplace rights, and undermining democratic institu-

tions. At the same time, in Europe, the United States, and other

locations around the world, nationalism manifests as constraints

on the movement of workers and bias against goods and services

from other locations (Burtless, 2001; Zaheer, 1995). Growing

nationalism exerts negative pressure on free trade, especially

regarding labor and the movement of goods and services. These

dynamics are well documented.

Less acknowledged than the dimensions of antiglobalization and

nationalism mentioned above is a variety of soft barriers that under-

mine global trade (Stringfellow, Teagarden, & Nie, 2008). These bar-

riers reside in the minds and mindsets (Goleman, 1995; Javidan,

Teagarden, & Bowen, 2010) of decision-makers and in the societal

values where the businesses originate.

One such soft barrier is the “hassle factor,”identified by Schotter

and Beamish (2013). Simply put, international business decision-

makers avoid foreign locations because it is too difficult to do busi-

ness there due to a wide variety of very real and perceived obstacles,

such as visa requirements, poor infrastructure, or poor travel connec-

tions. Hassle factors are at the top of mind for international business

decision-makers. These are conscious decisions to voluntarily with-

draw from some aspect of global trade.

Less visible, voluntary, and conscious are restraints to global trade

rooted in the decision-makers' psychology and in social psychology.

These involve psychological factors such as the decision-makers' level

of motivation, level of international experience, and export orienta-

tion. These individual psychological factors influence the ability and

willingness to engage in international trade and may be considered

trade barriers of the mind. Those with high levels of Global Mindset

are less susceptible to these less conscious dynamics (Javidan

et al., 2010).

Social–psychological fa ctors such as the firms' network rela tion-

ships, the country's guest worker orientation, and cultural and other

distances may be rooted in ingroup/outgroup distinctions that result

in biases such as ingroup bias (Hewstone,Rubin,&Willis,2002)

which may inhibit or enhance global trade. The documentation of

decision-making biases has a time-honored place in the literature

(Kahneman, Slovic, & Tversky, 1982). Linkages between biases and

decision-making in the international business literature are rare. To

the degree that international business decision-makers seek to be

aware of their bias es—to actively surface and manage them—they

are more likely to avoid being held hostage to soft barriers to global

trade. They will be empowered to make decisions more supportive

of global trade. Those with high levels of emotional intelligence are

more likely to avoid decision-making biases as they are more likely

to include others in the process and to welcome devil's advocates

(Goleman, 1995).

This issue of Thunderbird International Business Review com-

prises a set of articles that focus on the soft barriers to global trade. It

begins with an article by Nyuur, Ofori, and Amponsah that focuses on

the positive relationship between export orientation activities, corpo-

rate social responsibility, and competitive advantage in developing

country firms. Export orientation is partially embedded in the social

psychology of a nation.

Varma and Norlander explore the relationship between a guest

worker orientation and firm patents in the second article in this issue.

They consider how the country of origin and industry effect innova-

tion as measured by patents and general productivity. Within firms in

general, guest workers lower innovation and increase overall produc-

tivity. Guest worker orientation is partially embedded in the social

psychology of a nation.

The third article by Batsakis and Singh focuses on the geographic

and administrative distance between developed market and emerging

market. They conclude that previous emerging market experience

influences entry mode decisions and diminishes distance effects.

Decision-makers who can draw on previous experience perceive

lower risk due to familiarity independent of the actual risk. While

familiarity might enhance global trade, this trade may or may not be

more effective.

The fourth article by Delerue and Sicotte studies whether cultural

distance affects contract design and content. They find the influence

of cultural distance manifests in complex ways; for example, when

there is a very large cultural distance present, the contract will be less

detailed. Understanding the bias that cultural distance, a soft barrier

to global trade, introduces can guide decision-makers toward more

appropriate contracts.

The fifth article by Andersson and Sundermeir examines a

dimension of potential ingroup/outgroup bias. They explore how

networks are benefic ial to firms for gaining resources in ternationally.

They find organizational networks provide access to most resources

beneficial for interna tionalization. Howe ver, personal networ ks pri-

marily provide acce ss to human resources. The closer one gets to

DOI: 10.1002/tie.22071

Thunderbird Int. Bus. Rev. 2019;61:549–550. wileyonlinelibrary.com/journal/tie © 2019 Wiley Periodicals, Inc. 549