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.
Boarder between countries is a sensitive issue and tends to prevent freedom of movement [
India and Nepal have shared intense people-to-people relations for a very long time [
In the context of Nepal-India border issues, a very strong social, political and geographical proximity has benefitted people of both nations [
Borders as special form of regions have been significant subject of research in several regards: cross-border commuting, cross-border trade, cross-border labor markets and other [
In the Nepalese cross-border context, though several studies have already been conducted related to border, the issue of cross-border purchase has not been carried out. [
All the given studies focus on some political and social context and less discuss in cross border purchase. Hence, socio-cultural and economic effects on cross-border purchase lack comprehensive research. The present study, thus, aims to undertake a comprehensive analysis of the socio-cultural and economic factors affecting cross border purchase in Sunauli-Nepal/India border.
The remaining section is organized as follows: the second section follows with the materials and method used, third section supports the result and discussion and the last section provides concluding remarks.
This study was performed in Sunauli-India/Nepal border3. Small towns called Sunauli (in the India Side) and Belahiya in the Nepal side are abreast to the border. Nepal is land linked country located between two Asian giant economy nations China in the North and India in the East, South and Western parts [
Sunauli-Nepal/India border is the most crowded cross-flow route between Nepal and India [
The study area selection is based on purposive sampling4. The reason behind selecting purposive sampling in this study has two main reasons: the population is unknown and likely to change time and again; and visit of the people across the border from both country is not recorded as it is open border and people can stay as long as they want in both side of the border. [
The survey was conducted in the month of February 2018. A total of 429 individuals were interviewed, irrespective of gender, education status, culture, their residence and so on. Such respondents are both Nepali and Indian Nationals crossing the border for various reasons. Interviews were conducted for those people who were available in study area during the survey period. A fully structured questionnaire, with about 50 questions―both open ended and close ended, was used to gather information on their purchasing behavior and other socio-economic and cultural aspects that can influence their purchasing behavior. Pretesting of questionnaire and training to the enumerators were performed as per needed to avoid missing any important information and flaws.
Descriptive and inferential statistics are performed for data analysis. STATA version 13 has been used for statistical purposes. All necessary corrections such as Multicolinearity and Heteroscedasticity have been performed and elucidated in regression analysis part of the research (See
Border interaction is affected by large number of variables which is basically of social, cultural, economic and political nature [
First approach focuses on the physical flow of goods, services and people across the border; second focuses on the analysis of border region and institution that allows for interaction and economic development while the last one is based on social-construction, identity and culture [
The cross-border cooperation approach views peripheral region as frontiers for intense economic activities and emphasizes on cross border co-operation and strategies to overcome differences [
The people approach views border not as lines in space but as socially constructed separating by national identity, culture and language. Physical and economic barriers only do not determine the existence of border, a number of socio-cultural factors play vital roles. However, sometimes racial, religious, linguistic and cultural differences also act as separators; constructing stereotype, prejudice and otherization [
All the approaches estimate cross-border economic flows determined by social, cultural and economic factors [
For this study, binary Logit Regression Model was performed to identify the significant variable that determines consumers purchasing activities across the border with several other explanatory variables. Suppose Y is dichotomous variable assigned 0 for customer who has not purchased across the border and 1 involved on purchasing activities and X meant the socio-cultural and economic factors as mentioned in
P ( Y i / X ) = F ( Z j ) = e z i 1 + e z i = 1 1 + e − z i
P ( Y i = J / X i ) = F ( Z j ) = e z i 1 + e z i = 1 1 + e − z i
Z i = β 0 + β 1 X 1 i + ⋯ + β n X n i + μ i (5)
The logit regression equation that is used to ascertain variables influencing
VARIABLES | Mean | Std. Dev. | Description | Expected Sign* |
---|---|---|---|---|
Gender | 0.78 | 0.42 | Dummy takes the value 1 if married and 0 otherwise | ± |
Level of Education | 1.35 | 0.88 | Categorical | ± |
Goods in Local Market | 0.73 | 0.45 | Dummy takes the value if goods available in their local market and 0 otherwise | ? |
Economical Goods | 0.87 | 0.33 | Dummy takes the value if goods are economical across the border and 0 otherwise | + |
Language Similarity | 0.90 | 0.29 | Dummy takes the value if common language helps to purchase across the border and 0 otherwise | + |
Costumes Similarity | 0.53 | 0.50 | Dummy takes the value if common dress helps to purchase across the border and 0 otherwise | + |
Access to Communication | 0.74 | 0.44 | Dummy takes the value if they have access to communication across the border and 0 otherwise | + |
Communication Role | 0.72 | 0.45 | Dummy takes the value if communication helps to purchase across the border and 0 otherwise | + |
Role of Relatives | 0.38 | 0.49 | Dummy takes the value if relatives across the border helps to purchase and 0 otherwise | + |
Credit facilities | 0.16 | 0.37 | Dummy takes the value if customers received credit for purchase and 0 otherwise | + |
Price factor | 0.80 | 0.40 | Dummy takes the value if price is the main reason for purchase and 0 otherwise | + |
Hassel free import | 0.73 | 0.44 | Dummy takes the value if customers feel easy to bring goods from border and 0 otherwise | + |
Border disturbance | 0.53 | 0.50 | Dummy takes the value if disturbance in border area affect their purchase and 0 otherwise | ? |
Source: Authors’ calculation/ Assumption. *Sign of expected sign represent the sign of variables.
cross border purchasing behavior is:
Y = β 0 + β 1 x 1 + β 2 x 2 + β 3 x 3 + β 4 x 4 + ⋯ + β 13 x 13 + μ 0 (6)
where, Y is the peoples’ purchase across the Nepal-India border at Sunauli, β 0 is the constant coefficient, β 1 - 13 is regression coefficient and μ 0 is the error term. The estimated hypotheses in this study are:
H01: Open border has no effect on customers’ purchasing behavior in bordering area.
H02: Social factors do not have effects on customers’ purchasing behavior in bordering area.
H03: Cultural factors do not have effects on customers purchasing behavior in bordering area.
H04: Communication does not have effects on customers’ purchasing behavior in bordering area.
In this study, a majority of the respondents 78% were male and 22% of them were female involved in border purchase. 84.7% of the respondents were educated but their education level is mostly up to higher secondary level i.e. 12 years of average schooling. During their cross-border purchasing activities, female family members are seldom used. Majorities of (79.3%) of the respondents tell that they do not involve female family members in such purchase. It shows the prevalence of gender biasness in cross border purchasing activities similar to the socio-cultural practice in the Nepali society. The gender biasness is a social construction perpetuated from the distant past and affecting economic decision that is spending money in the open border purchase.
In the research, out of 429 respondents, 68.38% of them purchase general goods across the border followed by garment products (21.86%), store goods (19.06%), cosmetic products (7.4%), medicines (5.58%), hardware (4.65%) and insignificant others. It indicates that border customers mostly purchase the goods for daily household needs. These goods are generally available in their locality, as 71.2% stated, however they purchase such goods across the border for several reasons due to cheaper goods (65.1%), quality goods (41.2%), geographical proximities coupled with cultural homogeneity (20.7%), habituated (3%), friends-circle (3.5%) and so on.
In the border area, customers’ movements’ increase in the festivals commonly celebrated in both the nations―Tihar (Diwali in India), Dashain (Dahsera in India), Chhath, and Holy. Besides seasons and festivals, relatives living another sides of the border, their languages, customs and practices also influence for cross border purchase [
Communication in border area is another important influencing aspect for cross-border purchase [
This study observed very long evidence of purchasing goods across the border that ranges from less than a year to 60 years. It indicates that border activities for purchasing goods are quite a long phenomenon. Also, 90% and above respondents, who have been to purchase goods across the border, informed that they have good information about market and goods which they have been purchasing across the border. A majority of respondents (85.6%) purchase goods across the border believe that goods available across the border are economical to purchase. Half of the respondents tell that goods are economical while the remaining respondents do not agree to the situation. The study reveals that a respondent spends in an annual average NRs 206,615 in purchasing across the border. The purpose of this purchase ranges from households’ consumption goods to business intension.
Mostly customers purchase from different shops of their convenience but 35% of the consumers purchase from the same shop due to various reasons like credit facilities and their relationship across the border. 53.7% customers’ purchase from the same shop receives credit facilities up to a month. Due to various reasons, customers prefer to purchase on the Indian side of the border. In the research, it is observed that they give preference to purchase Indian side of the border as 45% consumers reveled their opinion to purchase only Indian side of the border and another 45% want to purchase both sides of the border and rest 10% prefer to purchase Nepal side of the border. In this context, 90% respondents believe economical price is the main factor for the greater volume of purchase in Indian side.
Open border is considered equally important factor for the customers who has involved in such cross-border purchasing activities. Out of the total respondents, 54.6% agreed that open border situation is contributing in the purchase of the border area while 45.4% did not agree to the case. 31.9% of them accepted that open border has very much affected the purchase, 20.8% feel moderately affected and about 2% of them feel less affected. The study also shows that 71.7% of them agree they have not experienced any difficulties in the border but 28.2% of them admit they have faced difficulties in the border. It means, different customers have faced different border situations depending on their purchase and border environment.
Regarding the frequency of purchase, 16.7% of them purchase daily in the border, 53.1% purchase every week, 23.9% of them purchase at least once in a month and rest 6.3% of them purchase once in a year. 75% of the customers mentioned it is easy to bring the purchased goods from the border. The border is quite often affected by the various disturbances like political agitation, border strike, and amendment in the import-export regulations, tax law and anti-social activities. 58.4% of the respondents tell that border disturbances take place quite often. 52.2% of the respondent also believed such disturbances moderately affect their purchase. Yet, optimistically, two third of the respondent (69.3%) firmly believed that such border hurdles on existing scenario can be systematized by strict rules and regulation at the check point, using technologies in check point like CCTV camera and maintaining the history of the visitors’ records.
This study is based on cross-sectional data. [
From the logistic regression, it is observed that goods available in local market, economical goods, language similarities and hassle free cross-border imports are statistically significant in both Logit and Probit Model8. All the variables are positive in sign that indicates the probability of cross-border purchase increases with the increase in the significant variables. It also shows that the odds ratio of the customers who purchase goods from cross border increases economic goods (15 times), hassle free cross-border imports (7 times), similarities in language (4 times) and goods available in local market (3 times) as to the customers who do not involved in cross border purchase activities.
Regression result reveals that there is significant relationship in cross-border purchase and small deviation in the peoples’ daily activities and their perception towards goods, prices, relationship and other issues may affect their purchase badly and also could bring lethargic to the people who is purchasing and willing to purchase across the border. It is therefore necessary to ponder on such issues from both sellers and policy makers so that the cross-border purchase last long with their mutual interest, cultural and social harmony. It would further help to strengthening border areas peoples’ socio-cultural and economic relationship along with border sharing countries. Additionally, it helps to reduce anti-border activities.
Nepal and India have a very long bilateral relationship in many aspects. The
VARIABLES | Logit Model | Probit Model | |
---|---|---|---|
Coefficient | Odds Ratio | Coefficient | |
Purchase across Border | |||
Gender | −1.347 (0.923) | 0.2599 (0.923) | −0.711 (0.472) |
Level of Education | −0.0754 (0.331) | 0.9273 (0.331) | −0.0109 (0.166) |
Goods available in Local Market | 1.268** (0.624) | 3.5537** (0.624) | 0.583* (0.300) |
Economical Goods | 2.727*** (0.786) | 15.2823*** (0.786) | 1.371*** (0.382) |
Language that helps to Purchase | 1.551** (0.725) | 4.7157** (0.725) | 0.884** (0.368) |
Dress help to Purchase | −0.379 (0.654) | 0.6847 (0.654) | −0.150 (0.315) |
Access to Communication | −1.251 (0.993) | 0.2860 (0.993) | −0.683 (0.511) |
Communication helps to Purchase | 0.775 (0.899) | 2.1711 (0.899) | 0.364 (0.454) |
Helps of Relatives to Purchase | 0.295 (0.710) | 1.3435 (0.710) | 0.292 (0.351) |
Goods in Credit | −1.333* (0.765) | 0.2637* (0.765) | −0.583 (0.391) |
Price as a Reason | 0.192 (0.690) | 1.2122 (0.690) | 0.180 (0.327) |
Easy to bring from Border | 1.952*** (0.662) | 7.0423*** (0.662) | 0.922*** (0.312) |
Disturbance affect Purchase | 0.152 (0.637) | 1.1639 (0.637) | −0.0161 (0.302) |
Constant | 0.00997 (1.216) | 1.0100 (1.216) | 0.0463 (0.650) |
Observations | 429 | 429 | 429 |
Pseudo R2 | 0.3327 | 0.3327 | 0.3410 |
Mean VIF | 1.76 |
Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.
open border of the nations has been foundation of opportunities for the people. The objective of this paper is to detangle the socio-cultural and economic nexus of cross border purchasing in Sunauli-Nepal/India border. The study exploits both Binary Logit Model and Binary Probit Model to identify the factors statistically affecting the cross-border purchase with 13 explanatory variables. The findings reveal that 78% of the male household members involve in cross-border purchase for a long period of time. It shows the prevalent gender discrimination perpetuated since long in the male chauvinistic patriarchal Nepali society. Though goods are available in their local area, 71.2% of the people are habituated to purchase the similar goods across the border. 77.2% of the total respondents purchase across the border during the major festivals. Similarly, due to easy access to communication, 71.6% people prefer to purchase across the border. Open border factor is equally important to stimulate cross border purchase as 54.6 of the respondents agreed that they purchase goods across the border due to hassle free border movements. Following the analysis, the study results in positive influence of socio-cultural characteristics in cross-border purchase.
The findings from logistic regression indicate that goods available in local market (1.268**), economical goods (2.727***), language similarities (1.551**) and hassle free cross-border purchase (1.952***) significantly and positively affect the probability of cross-border purchase activities. 85.6% of the respondents purchase goods from cross-border due to economic characteristics such as availability of goods, credit facilities, ranges of goods and their economical prices compared to the local market. The Odds Ratios of the statistically significant variables indicate that more than other factors, economic characteristics are all in all important in cross-border purchase.
To conclude, the emphasis should be based on perception of the people, harmony, trust, trade relation and international brotherhood for the sustainability of peaceful border activities, which the researchers believe will enhance and nurture cross-border purchase activities. Border hurdles should be jointly solved to enhance cross-border purchase and to minimize the growing political agitation of the people. The key areas of fair bilateral coverage, co-existence, mutual respect and cross-border connectivity should be preserved in pursuit of progress and optimizing mutual benefits. As the border areas in Nepal-India are far from central governments, their importance in terms of socio-cultural, historical and economic aspects should not be neglected.
Paudel, U.R., Devkota, N. and Bhandari, U. (2018) Socio-Cultural and Economic Factors in Cross-Border Purchase: A Study of Customers’ Perspective in Sunauli-Nepal/India Border. Modern Economy, 9, 1089-1102. https://doi.org/10.4236/me.2018.96070