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Cultural proximity: A source of trade flow resilience?

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  • Céline Carrère
  • Maria Masood

Abstract

While the significant influence of cultural proximity on bilateral trade flows has been extensively documented in the literature, its possible role in times of crisis has not yet been raised. Relying on a panel estimation of a gravity model incorporating cultural proximity parameters, we evidence the existence of a significant surge in the impact of the different components of cultural proximity during economic recession. The trade resilience among countries sharing a cultural bond is not a pure composition effect as it also appears within product categories. To understand this unexpected effect, we discuss different mechanisms that emphasise the potential mitigating influence of cultural proximity on some determinants of the trade collapse, namely the uncertainty shock, the increased moral hazard and the emergence of ethnocentric preferences.

Suggested Citation

  • Céline Carrère & Maria Masood, 2018. "Cultural proximity: A source of trade flow resilience?," The World Economy, Wiley Blackwell, vol. 41(7), pages 1812-1832, July.
    • Handle: RePEc:bla:worlde:v:41:y:2018:i:7:p:1812-1832
    DOI: 10.1111/twec.12646
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    Cited by:

    1. Chiappini, Raphaël & Jégourel, Yves, 2021. "“The buck stops with the executives”: Assessing the impact of workforce composition and cultural distance on French firms’ exports," Economic Modelling, Elsevier, vol. 94(C), pages 45-57.
    2. David Chilosi & Stefan Nikolić, 2021. "Vanishing borders: ethnicity and trade costs at the origin of the Yugoslav market," Working Papers 0214, European Historical Economics Society (EHES).
    3. Dezhong Duan & Qifan Xia, 2022. "From the United States to China? A trade perspective to reveal the structure and dynamics of global electronic‐telecommunications," Growth and Change, Wiley Blackwell, vol. 53(2), pages 823-847, June.
    4. Jing Li & Hongkui Liu & Qian Xie, 2023. "Bilateral Relations and Exports: Evidence from Google Big Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(1), pages 182-210, January.
    5. Xia, Qifan & Du, Debin & Cao, Wanpeng & Li, Xiya, 2023. "Who is the core? Reveal the heterogeneity of global rare earth trade structure from the perspective of industrial chain," Resources Policy, Elsevier, vol. 82(C).
    6. Bayarmaa Ganbaatar & Juan Huang & Chuanmin Shuai & Asad Nawaz & Madad Ali, 2021. "Empirical Analysis of Factors Affecting the Bilateral Trade between Mongolia and China," Sustainability, MDPI, vol. 13(7), pages 1-17, April.
    7. Anh Quang Phan, 2021. "From Print Texts to Online Gaming: The Cross-Cultural History of Wuxia Fictions in Vietnam," SAGE Open, , vol. 11(2), pages 21582440211, May.
    8. Liu, Ailan & Lu, Cuicui & Wang, Zhixuan, 2021. "Does cultural distance hinder exports?: A comparative study of China and the United States," Economic Modelling, Elsevier, vol. 105(C).
    9. Olivier BARGAIN & Jean-Marie CARDEBAT & Raphaël CHIAPPINI, 2020. "Trade Uncorked: Genetic Resistance and Quality Heterogeneity in Wine Exports," Bordeaux Economics Working Papers 2020-18, Bordeaux School of Economics (BSE).
    10. Sylvain Petit & Neelu Seetaram, 2019. "Measuring The Effect Of Revealed Cultural Preferences On Measuring The Effect Of Revealed Cultural Preferences On Tourism Exports," Post-Print hal-01924443, HAL.
    11. Qiao Chen & Jianquan Cheng & Zhiqin Wu, 2019. "Evolution of the Cultural Trade Network in “the Belt and Road” Region: Implication for Global Cultural Sustainability," Sustainability, MDPI, vol. 11(10), pages 1-23, May.

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