Differences Across Countries

Question 1

in a semi globalized world

Answer 1

both the differences and similarities between countries must be taken into account

Question 2

The effects of differences versus similarities on cross-border economic activity

Answer 2

are enormous and does not seem to be vanishing

Question 3

Distance suggests

Answer 3

a good set of metrics for capturing the difference versus similarities between countries

Question 4

Distance is a multidimensional contrast with four types of components

Answer 4

cultural, administrative, geographic and economic

Question 5

The CAGE framework applied at an industry level indicates

Answer 5

the importance of distance between countries is conditioned by or varies with industry characteristics.

Question 6

Applications of the CAGE framework

Answer 6

making differences visible, understanding the liability of foreignness, comparing foreign competitors, comparing markets, and distancing market sizes by distance.

Question 7

unilateral attribute

Answer 7

trade between two countries would be directly related to their economic sizes

Question 8

Bilateral attribute

Answer 8

related to the physical distances between two countries or differences between the home country and foreign country

Question 9

How does distance affect FDI

Answer 9

higher transport costs and hence, likely to cause a negative impact on the bilateral flows of trade and FDI. On the contrary, proximity makes transportation cheaper

Question 10

Multilateral

Answer 10

measures the administrative distance between a country and the rest of the world but still miss out on differences on difference

Question 11

Cultural distance

Answer 11

the attributes of a society that are sustained mainly by interactions among people rather than by state or law enforcer.; tend to reduce economic interactions. Ex: language, ethnicities, religion, lack of trust - bilateral

Question 12

nations with cultures that are insular or traditional

Answer 12

will have closed or isolated international trade and investments

Question 13

Administrative distance

Answer 13

laws, policies, and institutions that typically emerge from a political process and are mandated or enforced by governments. Affects cross-border activities due to colonial ties, common currency and son on.

Question 14

Geographic distance

Answer 14

affect cross-border economic activity in terms of a common land boarder, differences in time zones, climates. Unilateral - access to the ocean, within country distances to borders. Man made - transportation and communication infrastructure