Table: 6.29 The bivariate correlation between the independent variables and the success of economic relations in the neighboring country Table: 6.30 Stepwise multiple regression analysis of the success of economic relations. Table: 6.34 The bivariate correlation between the independent variables and the success of the economic relationship in the neighboring country Table: 6.35 Stepwise multiple regression analysis of the success of the economy.
List of Abbreviations
SASEC South Asia Sub-Regional Economic Cooperation SAARC Association of South Asia and Regional Cooperation SIDO Small Industries Development Organization.
Abstract
An Introduction
Northeastern Region of India And Trade Possibilities with Bangladesh
Review of Literature
Characterization of Existing Cross Border Trade Practices
Factors Focused on Regulatory/Trade Practice: Bivariate Analysis 150 6.5.5 Multivariate Analysis of Performance of Neighboring Economic Relations & Focus on Regulation/Trade Practice.
Summary of Findings and Conclusion
An Introduction
- Geographical Uniqueness and Trans Border Developments
- Developing Cross-Border Entrepreneurship
- Need for the Study
- Objectives of the Study
- Hypotheses to be Tested
- Study Coverage
- Methodology
- An Outline of the Work
The answer to the above questions would provide a de novo insight into the process of developing cross-border economic relations with Bangladesh (incidentally, with the other neighboring countries in the northeastern region of India). The study examines the development process of economic relations starting with the beginning and evolution of the relationship between the entrepreneurs involved in the cross-border trade using the state border of the states of Assam, Meghalaya and Tripura.
The Northeastern Region of India & Trade Possibilities with Bangladesh
- Introduction
- Status of the Northeastern Economy
- Overcoming Geo-political Rigidities
- Northeast India-Bangladesh Border
- Cross Border Economic Relationships
- Trade Friendliness of Bangladesh Market
- Trading Partners of Bangladesh
- Status and Trend of Bilateral Trade with India
- Composition of Export and Trend
- Composition of Import and Trend
- Trade Agreement between India–Bangladesh
- Land Port Customs Stations along Northeast - Bangladesh Border
- Conclusions
This has led to new hope in the development horizon of Northeast India with the increasing softening of geopolitical rigidity with neighboring countries, especially Myanmar and Bangladesh. Northeast India is no longer a burdensome periphery somewhere out there, but is poised to resume its dynamic role as a bridge to the booming economies of Southeast Asia and China for mutual benefit (S.P. Shukla Commission Report, 1999). While India's gain from the bilateral economic relationship as a whole may be limited, it could be substantial when measured in relation to the economy of the Northeast region of India.
Review of Literature
- Introduction
- Studies Based on Flow Approach
- Studies Based on Cross Border Cooperation Approach
- Studies Based on People Approach
Ultimately, this chapter reviewed the literature, seminar papers, and government-sponsored studies in the context of trade between Northeast India and Bangladesh. The studies, categorized as a flow approach, focus on the physical flow of economic activities across borders. The Government of India (2002) gave an overview of the trade that took place across the border between India and Bangladesh in the “Report of the committee on informal cross border trade”.
This study was one of the pioneer studies in cross-border trade between India and Bangladesh to identify the border points through which the illegal trade continues.
Conceptual Framework & Data Description
Introduction
Conceptual Framework
The prospect of continuation is important due to the fact that relationship between the actors deepens with continuation of economic activities. The network will assist in the creation of a stable environment where cross-border business interest can grow according to the need of the rapidly changing market demand that cuts across the national border. Recent literature also refers to the improved opportunities for the development and diffusion of innovative activities due to the presence of economic relations across the border.
Second, the cross-border interaction and cohesion between entrepreneurs from Northeast India and Bangladesh can have many positive effects on the economy of the underdeveloped Northeast region of India, and for that matter, Bangladesh too.
The Relevant Economic Theory
- Transaction Cost Approach (TCA)
- International Network Approach (INA)
- Psychic Distance Approach (PDA)
- Towards a Synthesis of TCA, INA, PDA
Buckley and Casson extended Williamson's transaction cost approach and blended it with firm-specific advantage theory to provide an explanation for the existence of multinational enterprises (MNEs). The transaction cost approach is simple and based on a simple interpretation of the amount of transaction costs. Both the transaction cost approach and the eclectic paradigm focus on a firm's autonomy in developing its international marketing activities.
Later, Johanson and Mattsson (1988) presented a hypothesis about the internationalization of firms, in which the interaction between firms is examined as a network of relations and considered as 'the market as a network and networks are institutions themselves'.
The Model
This combination approach is holistic and process-based and explains small business internationalization from scratch by taking the wisdom of the three individual approaches. The combination approach can explain the history of a transaction with a clear difference between a transaction and a relationship, and especially by including determinants at different stages of the development process of economic relationships. Conceptual Framework and Data Description 57. a) is able to provide a description of the process of developing relationships at the level of entrepreneurs.
As this study tries to understand the growth pattern of cross-border economic intertwining between entrepreneurs from the three states of Northeast India and Bangladesh mainly from two perspectives; firm/entrepreneur-centric factors involved in the relationship formation process and the role of regulation/trade practice-centric factors in the background of the existing cross-border trade between the entrepreneurs, the process-based INTERFACE model fits perfectly with the need of the research.
The Model and Different Stages
- Contact Stage
- Action Space
- Cognition Space
- Attraction
- Interaction
- Transaction
- Relationship phase
- Success
- Consolidation Phase
- Determinants of INTERFACE Model
It is expected that the spatial identity of the entrepreneur will influence the desire to establish cross-border economic contacts. Entrepreneurs involved in cross-border economic activities may have cognitive representation of the neighboring country (difference between things as they really are and things as they appear). Therefore, in the interaction stage, the factors of interest are: i) the height of the transaction costs, and (ii) the degree of trust in the interaction between the partners.
Relationship Success Rating Indicates the degree to which a border crossing relationship is successful.
Data Description
The Survey Instruments
This retrospective enabled the study to follow the process of relationship formation over time. Other questions included in the questionnaire were about the identity of the respondents, their assessment of the state border and their perception of the differences experienced in the relationship between their country of origin and Bangladesh. Therefore, the respondents, being the sole representative of the entire enterprise, were asked to complete the questionnaire only by themselves.
In order to ensure as correct an image of each company as possible, less small companies were asked to handle the questionnaire at best at the management level, if the entrepreneur does not have time.
Approach and Collection of Data
Second phase planned for questionnaire survey among the entrepreneurs involved in cross-border trade with the active support of the trade associations. During the visit, the sector organizations were also contacted and an explanation was given about the importance of the research and the ongoing study. The breakdown of the 79 respondents by state and trade organization is shown in the table below.
For analyzes of the data, both primary and secondary, various statistical tools were used in the study.
Applicability of the Interface Model
Conceptual Framework, & Data Description 76. relationship in the neighboring country, the bivariate correlation techniques were used for analyses.
Characterization of Existing Cross Border Trade Practices
- Introduction
- Description of the Land Routes for Cross Border Trade
- Land Routes for Cross Border Trade: Assam
- Land Routes for Cross Border Trade : Meghalaya
- Land Routes for Cross Border Trade: Tripura
- Economic Relationships: Volume Trend etc
- Borders in Terms Trade Volume
Ferryghat LCS is located in the town of Karimganj and on the bank of the Kushiara River. Located in the South Garo hills of Meghalaya, Baghmara LCS mainly handles export traffic of NEI silk. Bhollaganj LCS is located in the East Khasi Hills of Meghalaya and is at a distance of 80 km from Shillong, the capital of Meghalaya.
The official entry point is Srimantapur / Sonamura (India) and the exit point is Bibirbazar (Bangladesh).
Trade Volume wise Land Port Customs Points (1996-02)
- Commodities Exported / Traded: Assam to Bangladesh
- Commodities Exported / Traded: Meghalaya to Bangladesh
- Commodities Exported / Traded: Tripura to Bangladesh
- Commodities Exported / Traded: Bangladesh to Assam
- Commodities Exported / Traded: Bangladesh to Meghalaya
- Commodities Exported / traded: Bangladesh to Tripura
- Conclusions
This shows that even in the case of Meghalaya – Bangladesh trade, restricted goods constitute a major part of the trade volume. Categorizations not only help to understand the trend of demand for goods in the cross-border market, but also indicate trade diversity. The table below reveals that the Agartala border has been very efficient and has handled most of the trade in recent years.
However, in the import of goods only two items like Hilsa fish and dry fish account for about 93.2 percent of the total import of Rs 39.53 crore.
Introduction
Respondent Enterprise and Length of Trade Relationship
Therefore, growth of the relationship is very dependent on the success of each transaction. In Meghalaya, about 68.5% of the enterprises that participated in the survey have less than six years of trading relationship. Similarly, the majority of the companies (59%) in Assam have been trading with Bangladesh for more than six years.
This indicates that the majority of respondents from Meghalaya and Tripura are relatively young in terms of cross-border relationships than the majority of Assam respondents.
Main line of Business in India
Ownership Structure and Size of the Enterprises
In terms of company size, 87% of the companies have a business turnover of more than Rs 10 lakh, which includes revenue from cross-border trade. Similarly, in Assam, about 73% of the companies have more than Rs 10 lakh business turnover. In a departure from the trend, businesses in Tripura are almost evenly distributed between the more than Rs 10 lakh category and the less than Rs 10 lakh category in terms of their business turnover.
An interesting aspect in the issue of enterprise income is that trade with Bangladesh accounts for a large share of the gross revenue earnings of respondent enterprises, regardless of the location of the enterprises.
Employment in the Enterprises
Operational Role
Type of Trade Relationship with Bangladesh and Spread
As shown in Table 6.7, about 66% of the companies in Meghalaya are involved in exports only, while the rest viz. 34%, in exports and imports, which indicates greater exports than imports. The propensity to import is further reduced in the case of Assam, where only about 23% of the firms are involved in both export and import and the rest are in export only. Another important feature observed in relation to cross-border relations is that almost none of the entrepreneurs interviewed have trade relations with any country other than Bangladesh.
This indicates that the long international border between the states of the region and Bangladesh and the country customs points located along the border provide immediate opportunities to the entrepreneurs to go for internationalization.
Social Network and Professional Contact
- Contact and Visiting Frequency
- Indirect Contact
- Relationship Preference
- Mental Distance
- Physical Distance
- Border Evaluation
- Hierarchy of Spatial Identity
- Level of Attraction
- Spatial Proximity
- Level of Interaction
- Level of Transaction
- Success
Based on seven questions, the relationship preference of the entrepreneurs involved in cross-border trade with one or more relations in the neighboring country was investigated. This is followed by easy access to the neighboring country's market through others. One of the important considerations in cross-border economic relations with neighboring countries has been spatial proximity.
The study attempted to record the interaction between entrepreneurs in the region and Bangladesh.
Determinants of Critical Factors for Success of Cross Border Relationship
- The Success of Economic Relationship and Direct and Indirect Contact of the Entrepreneurs
- Success of Economic Relationship and Relationship Preference of the Entrepreneurs
- The Success of Economic Relationship and Mental Distance of the Entrepreneurs
- The Success of Economic Relationship and Feeling at Home Attitude of the Entrepreneurs
- The Success of Economic Relationship and Border Evaluation, Spatial Identity of the Entrepreneurs
- The Success of Economic Relationship and Level of Attractions of the Entrepreneurs
- The Success of Economic Relationship and Level of Interaction of the Entrepreneurs
- The Success of Economic Relationship and Transaction Level of the Entrepreneurs
The bivariate correlation between the independent variables and the success of economic relationship in the neighboring country. Table: 6.25 The bivariate correlation between the independent variables and the success of economic relations in the neighboring country. Table: 6.26 The bivariate correlation between the independent variables and the success of economic relations in the neighboring country.
Table: 6.27 The bivariate correlation between the independent variables and the success of economic relations in the neighboring country.
Multivariate Analysis of the Success of Economic Relations in the Neighbouring Country
Table 6.30 below presents the independent variables of the analysis and their explanatory value according to the model of Draper and Smith (1981) for 15 independent variables. The multiple regression coefficient (R²) indicates that the fifteen variables included in the regression equation could predict about 70 percent of the dependent variable, ie. The combined influence of the above four variables on relationship success is 56.9 percent.
In short, the fifteen factors mentioned above have a great impact on the success of the development of cross-border relations.
Regulation/ Trade Practice Centric Factors: An Analysis
- Market Related Problems
- Business Conventions
- Government Regulations
- The Success Of Cross –Border Economic Relationship and Regulation/ Trade Practice Centric Factors: Bivariate Analysis
- Multivariate Analysis of the Success of Economic Relations in the Neighbouring Country and Regulation/ Trade Practice Centric Factors
As shown in Table 6.32, some Meghalaya entrepreneurs expressed their frustrations with Bangladesh's sense of superiority. The second analysis includes an investigation of the central regulatory/trade practice factors that play a crucial role in the success of cross-border economic relations in Bangladesh. From the bivariate correlation analysis it has been revealed that a number of variables related to the central factors of regulation/trade practice correlate significantly with the dependent variable of the success of economic relations in the neighboring country negatively.
The bivariate analyzes conducted in the previous section provided an understanding of the interrelationship of the factors with the success of the economic relationship.
Introduction
Findings
- Volume of Export/Import and Trend
