How do different dimensions of distance affect market entry mode choice ? An application of the CAGE-distance framework

Abstract : The purpose of this article is to assess the impact of national distance on market entry mode choice. Using the CAGE framework proposed by Ghemawat (2001), the authors measure the effect of four different dimensions of distance on the choice between cooperation and merger-acquisition. The hypotheses are tested on a sample of 203 interfirm linkages formed by French companies with partners across the world. The results indicate that administrative and economic distance has a significant influence on market entry mode choice, whereas the impact of cultural and geographic distance is not significant.