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Cultural Distance and International Trade

Author

Listed:
  • Jason Query

    (Western Washington University)

  • Jon C. Thompson

    (Willamette University)

Abstract

In this paper, we examine the trade impact of cultural distance using eight cultural characteristics: religion, the environment, family, the role of government, taxes, business views, trust, and worldviews. We find that distance on the trust and business dimensions are both statistically and economically significant determinants of trade. A one standard deviation increase in trust distance will decrease trade by the equivalent of a roughly 2.2% increase in geographic distance. A one standard deviation increase in business distance will decrease trade by the equivalent of a roughly 1% increase in geographic distance.

Suggested Citation

  • Jason Query & Jon C. Thompson, 2024. "Cultural Distance and International Trade," Open Economies Review, Springer, vol. 35(2), pages 283-300, April.
    • Handle: RePEc:kap:openec:v:35:y:2024:i:2:d:10.1007_s11079-023-09729-2
    DOI: 10.1007/s11079-023-09729-2
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    More about this item

    Keywords

    Trade; Cultural distance; Gravity Model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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