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“Linguistic Distance” as a Determinant of Bilateral Trade

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  • William K. Hutchinson

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    (Department of Economics, Vanderbilt University)

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    Abstract

    We introduce a measure of language difficulty called “linguistic distance” into a modified gravity model to determine whether a language being further away from English affects the level of trade. Our sample of 36 non–English-speaking countries includes Japan and South Korea, which we argue are special cases because of World War II, the Korean War, and subsequent close political and economic ties with the United States. Presence of a stock of immigrants in the home country has been shown to enhance trade with the country of origin. Controlling for immigrant network and information attributes, the special relationship with Japan and Korea, and the standard gravity model variables, we find that trade will be less between the United States and a country the further that country's language is from English. These results hold for aggregate exports and imports and for exports and imports of consumer and producer manufactures.

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    Bibliographic Info

    Article provided by Southern Economic Association in its journal Southern Economic Journal.

    Volume (Year): 72 (2005)
    Issue (Month): 1 (July)
    Pages: 1–15

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    Handle: RePEc:sej:ancoec:v:72:1:y:2005:p:1-15

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    Web page: http://www.southerneconomic.org/
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    Cited by:
    1. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
    2. Antonio Di Paolo & Aysit Tansel, 2013. "“Returns to Foreign Language Skills in a Developing Country: The Case of Turkey”," AQR Working Papers 201311, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2013.
    3. Murat, Marina, 2014. "Out of Sight, Not Out of Mind. Education Networks and International Trade," World Development, Elsevier, vol. 58(C), pages 53-66.
    4. Galina Shirokova & Patricia McDougall-Covin, 2012. "The role of social networks and institutions in the internationalization of Russian entrepreneurial firms: Do they matter?," Journal of International Entrepreneurship, Springer, vol. 10(3), pages 177-199, September.
    5. Herrmann-Pillath, Carsten & Libman, Alexander & Yu, Xiaofan, 2014. "Economic integration in China: Politics and culture," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 470-492.

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