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Foreign Languages and Trade

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  • Jan Fidrmuc
  • Jarko Fidrmuc

Abstract

Cultural factors and especially common languages are well-known determinants of trade. By contrast, the knowledge of foreign languages was not explored in the literature so far. We combine traditional gravity models with data on fluency in the main languages used in EU and candidate countries. We show that widespread knowledge of languages is an important determinant for foreign trade, with English playing an especially important role. The robustness of our results is confirmed by a natural experiment of trade between Eastern and Western Europe.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2014/wp-cesifo-2014-02/cesifo1_wp4670.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4670.

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Date of creation: 2014
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Handle: RePEc:ces:ceswps:_4670

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Related research

Keywords: gravity model; foreign trade; economics of languages; natural experiment; median regression; quantile regression;

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References

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Citations

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Cited by:
  1. Peter Egger & Andrea Lassmann, 2014. "Cultural Integration and Export Variety Overlap Across Countries," CESifo Working Paper Series 4800, CESifo Group Munich.
  2. 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.
  3. Anghel, Brindusa & Cabrales, Antonio & Carro, Jesus, 2012. "Evaluating a bilingual education program in Spain: the impact beyond foreign language learning," CEPR Discussion Papers 8995, C.E.P.R. Discussion Papers.
  4. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
  5. Ingo Isphording, 2013. "Returns to Local and Foreign Language Skills – Causal Evidence from Spain," Ruhr Economic Papers 0398, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Fidrmuc, Jarko & Senaj, Matus, 2012. "Human Capital, Consumption, and Housing Wealth in Transition," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62058, Verein für Socialpolitik / German Economic Association.
  7. Daria Ciriaci & Alessandro Muscio, 2011. "University choice, research quality and graduates' employability: Evidence from Italian national survey data," Working Papers 48, AlmaLaurea Inter-University Consortium.

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