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Cage Method

In: Business and Management

Submitted By witchofhershey
Words 250
Pages 1
The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.[1] It may also be used to understand patterns of trade, capital, information, and people flows.[2] The framework was developed by Pankaj Ghemawat, a professor at the IESE Business School in Barcelona, Spain.[3]
The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Such models "resemble Newton's law of gravitation in linking interactions between countries to the product of their sizes (usually their gross domestic products) divided by some composite measure of distance."[2]
Components[edit source | editbeta]

The table[4] shown below provides more detail on each of the CAGE categories, and how they can manifest themselves depending on whether one is comparing a pair of countries or looking at one in isolation. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.[1]
Cultural Distance Administrative Distance Geographic Distance Economic Distance
Country Pairs (Bilateral)
Different languages
Different ethnicities; lack of connective ethnic or social networks
Different religions
Lack of trust
Different values, norms, and dispositions
Lack of colonial ties
Lack of shared regional trading bloc
Lack of common currency
Political hostility
Physical distance
Lack of land border
Differences in time zones
Differences in climates / disease environments
Rich/poor differences
Other differences in cost or quality of natural resources, financial resources, human resources, infrastructure, information or knowledge…...

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