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Cultural distance as a determinant of bilateral trade flows: do immigrants counter the effect of cultural differences?

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  • Bedassa Tadesse
  • Roger White

Abstract

We introduce 'cultural distance' as a measure of the degree to which shared norms and values in one country differ from those in another country, and employ a modified gravity specification to examine whether such cultural differences affect the volume of trade flows. Employing data for US state-level exports to the 75 trading partners for which measures of cultural distance can be constructed, we find that greater cultural differences between the United States and a trading partner reduces state-level exports to that country. This result holds for aggregate exports, cultural and noncultural products exports as well, but with significantly different magnitudes. Immigrants are found to exert a pro-export effect that partially offsets the trade-inhibiting effects of cultural distance.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 17 (2010)
Issue (Month): 2 ()
Pages: 147-152

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Handle: RePEc:taf:apeclt:v:17:y:2010:i:2:p:147-152

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Cited by:
  1. Nuno Carlos Leitão, 2013. "The Impact of Immigration on Portuguese Intra-Industry Trade," Working Papers 2013.20, Fondazione Eni Enrico Mattei.
  2. Cantore, Nicola & Canavari, Maurizio & Pignatti, Erika, 2008. "Organic certification systems and international trading of agricultural products in gravity models," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6159, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. David Law & Murat Genc & John Bryant, 2009. "Trade, diaspora and migration to New Zealand," Trade Working Papers 23005, East Asian Bureau of Economic Research.
  4. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2011. "The impact of immigration on international trade: a meta-analysis," Norface Discussion Paper Series 2011020, Norface Research Programme on Migration, Department of Economics, University College London.
  5. Michael Good, 2013. "Geographic Proximity and the Pro-trade Effect of Migration: State-level Evidence from Mexican Migrants in the United States," 2013 Papers pgo530, Job Market Papers.
  6. Núria Quella & Silvio Rendon, 2012. "Occupational selection in multilingual labor markets: the case of Catalonia," International Journal of Manpower, Emerald Group Publishing, vol. 33(8), pages 918-937, July.
  7. Artal-Tur, Andrés & Pallardó-López, Vicente J. & Requena-Silvente, Francisco, 2012. "The trade-enhancing effect of immigration networks: New evidence on the role of geographic proximity," Economics Letters, Elsevier, vol. 116(3), pages 554-557.
  8. Ehrhart, Helene & Le Goff, Maelan & Rocher?, Emmanuel & Singh, Raju Jan, 2014. "Does migration foster exports ? evidence from Africa," Policy Research Working Paper Series 6739, The World Bank.
  9. Peter H. Egger & Maximilian von Ehrlich & Douglas R. Nelson, 2012. "Migration and Trade," The World Economy, Wiley Blackwell, vol. 35(2), pages 216-241, 02.
  10. Michael Good, 2012. "How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States," Working Papers 1203, Florida International University, Department of Economics.
  11. Francisco Requena & Vicente Pallardó & Andrés Artal, 2012. "Which immigrants stimulate exports in their host country? (en homenaje a José Vicente Blanes)," Working Papers 1207, Department of Applied Economics II, Universidad de Valencia.
  12. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics 2011/19, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  13. Oxana Babecká Kucharčuková & Jan Babecký & Martin Raiser, 2012. "Gravity Approach for Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Open Economies Review, Springer, vol. 23(2), pages 277-301, April.
  14. Luis Angeles, 2012. "Is there a role for genetics in economic development?," Working Papers 2012_02, Business School - Economics, University of Glasgow.
  15. Oxana Babecka Kucharcukova & Jan Babecky & Martin Raiser, 2010. "A Gravity Approach to Modelling International Trade in South-Eastern Europe and the Commonwealth of Independent States: The Role of Geography, Policy and Institutions," Working Papers 2010/04, Czech National Bank, Research Department.

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