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MENTAL MODEL · M6533

CAGE Distance Framework

CAGE Distance Framework
BusinessHigh supportEconomics
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

Proposed by Pankaj Ghemawat, it is used to assess the impact of 'distance' between countries on business: C (Cultural): Cultural distance - differences in language, religion, values, and social norms. A (Administrative): Administrative distance - differences in political systems, legal systems, and colonial history. G (Geographic): Geographic distance - physical distance, time zones, climate, and transportation infrastructure. E (Economic): Economic distance - income levels, stage of economic development, and currency stability.

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

Go beyond physical distance to comprehensively assess market differences. Traditional internationalization analysis often overemphasizes geographic distance, while CAGE...

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Anchor fast decisions

Based on 'multidimensional distance'. Differences between countries are not only geographic but also include four types of distance: cultural, administrative, geographic, and economic. The greater the distance, the higher the transaction costs.

MINIMUM ACTION

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/CAGE_Distance_FrameworkZH · Explicit
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