Read the full article [[here|/static/files/MBI/Module%2021/Distance%20still%20matters.pdf]]

* [[Cultural Distance]]
* [[Administrative Distance]]
* [[Geographic Distance]]
* [[Economic Distance]]

The summary of the article is captured in this table:

||[[Cultural Distance]]|[[Administrative Distance]]|[[Geographic Distance]]|[[Economic Distance]]|h
|''Distance between two countries increases with. . .''|• Different languages, ethnicities, religions, social norms<br>• Lack of connective ethnic or social networks|• Absence of shared monetary or political association<br>• Political hostilities<br>• Weak legal and financial institutions|• Lack of common border, waterway access, adequate transportation or communication links <br>• Physical remoteness<br>• Different climates|• Different consumer incomes<br>•  Different costs and quality of natural, financial, and human resources<br>• Different information or knowledge|
|''Distance most affects industries or products. . .''|• With high linguistic content (TV)<br>• Related to national identity (foods)<br>• Carrying country-specific quality associations (wines)|• That a foreign government views as staples (electricity), as building national reputations (aerospace), or as vital to national security (telecommunications)|• With low value to- weight ratio (cement)<br>• That are fragile or perishable (glass, fruit)<br>• In which communications are vital (financial services)|• For which demand varies by income (cars)<br>• In which labor and other cost differences matter (garments)|

<<tiddler [[The CAGE Distance Framework]]>>

Common currency, for example, boosts trade more than 300%.

|Distance Attribute|International Trade (%)|h
|income level: GDP per capita (1% increase)|+0.7|
|economic size: GDP (1% increase)|+0.8|
|physical distance (1% increase)|-1.1|
|physical size (1% increase)*|-0.2|
|access to ocean*|+50|
|common border|+80|
|common language|+200|
|common regional trading bloc|+330|
|colony-colonizer relationship|+900|
|common colonizer|+190|
|common polity|+300|
|common currency|+340|
bag
mbi_public
created
Thu, 05 Jan 2012 13:20:38 GMT
creator
dirkjan
modified
Thu, 05 Jan 2012 13:20:38 GMT
modifier
dirkjan
tags
Article
M21
creator
dirkjan