Abstract

What has come to be known as psychic distance paradox suggests that entry into low psychic distance markets may improve performance. However, firms doing so may face shocks produced by unforeseen differences that could precipitate failure. In this developmental paper, we draw on Relational Resource Theory (RRT) to address psychic distance contradictions, by exploring the impact of Cultural Intelligence (CQ) on psychic distance – focusing on motivational and metacognitive dimensions. To achieve this, our study aims to test 5 hypotheses, and analyse 228 survey data gathered from participants in the Nigerian automobile industry. The hypotheses to be tested are: H1: motivational CQ is negatively associated with psychic distance; H2: metacognitive CQ is negatively associated with psychic distance; H3: motivational CQ is positively associated with relational performance; H4: metacognitive CQ is positively associated with relational performance, and H5: psychic distance is negatively associated with relational performance. Based on the analysis of the above hypotheses, the findings and implications of the study are discussed.