Differences between Croatia and EU Candidate Countries: the CAGE Distance Framework

Background: Nowadays, international cooperation is unevenly divided among countries. The decisive criteria imply cultural, administrative, geographical, and economical closeness among countries. Therefore, understanding such factors can significantly facilitate the performance of the company on foreign market. Objectives: The goal of this paper is to identify the fundamental differences between Croatia and the EU candidate countries through a comprehensive and systematic analysis of the determinants within the CAGE Distance Framework. This systematic analysis can significantly intensify Croatia's international exchange and improve Croatia's performance at important foreign markets. Methods/Approach: Research comprises original datasets on distance factors within CAGE distance framework. With cultural, administrative, geographic and economic data of Croatia and EU candidate countries, empirical support about the impact of distinctions on international exchange has been given. Results: Cultural and geographical similarities are particularly noticeable among Croatia and EU candidate countries, although there are also no significant differences in the administrative and the economic dimension. However, Turkey is the only country that somewhat differs in each segment. Conclusions: Similarities have significant influence on cross-border trade. With all present similarities and differences, cooperation among Croatia and the EU candidate countries has a perspective for development, especially at a time when all candidate countries join the EU.