Socio-Cultural and Economic Factors in Cross-Border Purchase: A Study of Customers’ Perspective in Sunauli-Nepal/India Border

Udaya Raj Paudel,Udbodh Bhandari,Niranjan Devkota

doi:10.4236/me.2018.96070

Abstract

Nepal and India sustain bilateral relationship and share social, cultural, economic, political and geographical proximities contributing people of both nations to a number of advantages. This study analyzes socio-cultural, geo-political, and economic proximities contributing people of Sunauli-India/Nepal border exploiting purposive sampling in 429 respondents with a structured questionnaire survey in February 2018. Descriptive and inferential data analysis techniques are performed along with Logistic Regression Model to interpret the determinants of cross-border purchase. The result revealed 96.3% of the total respondents involved in purchase, out of them, 85.6%, 77.2%, 71.6%, 71.2% and 54.6% purchase due to economical price of the goods, festivals, communication access, habit and open border factors respectively. The empirical results of the binary logistic regression models revealed different effects of the factors on customers cross border purchase. Economical goods (2.727***), hassle free cross-border imports (1.952***), language similarities (1.551**) and goods available in local market (1.268**) significantly and positively affect the cross-border purchasing activities and the Odds Ratio of given variables is 15.28, 7.04, 4.71 and 3.55 respectively. Following the analysis, the study concludes that there is positive influence of socio-cultural characteristics in cross border purchase. Open border factor is equally important to stimulate such purchasing activities. More than other factors, economic characteristics as availability of goods, their types and economical price are all in all important.

Highlights

Boarder between countries is a sensitive issue and tends to prevent freedom of movement [1] [2]
Descriptive and inferential data analysis techniques are performed along with Logistic Regression Model to interpret the determinants of cross-border purchase
The result revealed 96.3% of the total respondents involved in purchase, out of them, 85.6%, 77.2%, 71.6%, 71.2% and 54.6% purchase due to economical price of the goods, festivals, communication access, habit and open border factors respectively

Summary

Introduction

Boarder between countries is a sensitive issue and tends to prevent freedom of movement [1] [2]. There has been a long tradition of free movement of people across the borders. The last decades have seen a proliferation of institutionalized cross-border cooperation structures around the world [3]. People move back and forth in the open border area for purchasing daily consumer goods and for business purpose. This type of phenomena appears worldwide in the open-border countries. Cross-border cooperation is becoming an increasingly important factor in establishing a stimulating business environment that includes different levels of cooperation between regions of neighboring states [5]. Without strengthening cultural cross-border relation, it is impossible to build strong links and cooperation between neighboring nations [6]

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Conclusion