THE FURTHER THE DISTANCE, THE CLOSER THE TIES

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Abstract

In his article ‘death of distance’, Caincross (1997) challenged the orthodoxy with regard to the role and direction of proximity in international trade. The mainstream model for trade analysis, the gravity model has only two prominent determinants – one of which is distance. But while this theory predicts a negative impact of distance on trade, empirical evidence seems to be evenly split between those finding a positive and those finding a negative impact of distance on trade. South Africa’s total exports to three groups of countries at different distances are measured to determine the impact of distance. The results indicate that distance shows a negative sign when African countries are concerned but turns positive when European countries, even more distant, enter the equation.

Keywords: International Trade, Distance of Trade, Exports

How to cite this paper: Jordaan, A. C. (2015). The further the distance, the closer the ties. Journal of Governance and Regulation, 4(1), 35-46. https://doi.org/10.22495/jgr_v4_i4_p4