ABSTRACT
In 1997, at the peak of the globalization wave, Frances Cairncross, editor of The Economist, compellingly proclaimed the ‘death of distance’. She argued that the communication revolution would bring down communication costs to such an extent that distance would no longer be a relevant barrier for social and economic interaction (Cairncross, 1997, 2000). A distinctive competitive advantage of an MNE-compared to a domestic company-is precisely its ability to manage distance. Across distant borders, product and factor markets are very imperfect. The key competitive edge of a multinational is generally considered to be the company-internal exploitation of these international market imperfections. If distance became obsolete, it would lose its competitive advantage and render a separate approach to ICR superfluous.
