The Effect Of Psychic Distance On Kenyas Export Destinations

Abstract

Exports can be an important component of the growth strategy for developing countries, and an understanding of export destination choices can help to facilitate that growth. This paper uses the concept of psychic distance to examine Kenyas export pattern to selected markets. Regression analysis indicates that Kenyas total exports are significantly associated with countries that are psychically close (Uganda, Tanzania, and the United Kingdom), but not with countries that are psychically distant (Ethiopia, Egypt, and the United States). Thus, psychic distance explains Kenyas export choices better than geographic distance does. The paper concludes with suggestions about ways that an understanding of psychic distance can help Kenya and other countries that seek to expand their economies through export.