CAGE distance framework and bilateral trade flows: case of India

Kalpana Tokas and Arnab Kumar Deb

Management Research Review, 2020, vol. 43, issue 10, 1157-1181

Abstract: Purpose - The paper is in the area of international business and international trade. Specifically, this paper aims to focus on cross-border trade flows of goods and services between India and its partner nations. Design/methodology/approach - Using the Cultural, Administrative, Geographic and Economic (CAGE) distance framework (Ghemawat, 2001), this paper provides empirical support for the impact these distance factors exert on the volume of trade in goods and services between countries. The sample used for empirical analysis consists of a set of 62 OECD countries which are involved in trade in goods and services with India over the period 2005 through 2015. This paper estimates a fixed-effects model to provide a comprehensive examination of all the distance factors impacting the bilateral cross-border trade flows of India. Findings - The empirical findings in this paper show that different dimensions of the CAGE distances have varied influence on volume of trade flows between India and its trading partners. Also, the extent of this influence is guided by the nature of industries – manufacturing or services. Originality/value - Departing from the common practice in the literature, using the trade flow data for both Indian manufacturing and service sectors separately, this paper examines to what extent is the impact of these distance factors industry driven.

Keywords: International business; Globalization; Cultural distance; Manufacturing sector; Administrative distance; Cross-border trade flows; Economic distance; Geographic distance; Services sector (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:mrrpps:mrr-09-2019-0386

DOI: 10.1108/MRR-09-2019-0386

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