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Somatic Distance, Cultural Affinities, Trust and Trade

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  • Jacques Melitz
  • Farid Toubal

Abstract

Somatic distance, or differences in physical appearance, proves to be extremely important in the gravity model of bilateral trade in conformity with results in other areas of economics and outside of it in the social sciences. This is also true quite independently of survey evidence about bilateral trust. These findings are obtained in a sample of the 15 members of the European Economic Association in 1996. Robustness tests also show that somatic distance has a more reliable influence on bilateral trade than the other cultural variables. The article finally discusses the interpretation and the breadth of application of these results.

Suggested Citation

  • Jacques Melitz & Farid Toubal, 2018. "Somatic Distance, Cultural Affinities, Trust and Trade," CESifo Working Paper Series 7051, CESifo.
    • Handle: RePEc:ces:ceswps:_7051
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp7051.pdf
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    References listed on IDEAS

    as
    1. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    2. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    3. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2019. "Language skills and homophilous hiring discrimination: Evidence from gender and racially differentiated applications," Review of Economics of the Household, Springer, vol. 17(1), pages 349-376, March.
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    5. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
    6. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1095-1131.
    7. Ernst Fehr, 2009. "On The Economics and Biology of Trust," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 235-266, 04-05.
    8. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
    9. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    10. Eva Spring & Volker Grossmann, 2016. "Does bilateral trust across countries really affect international trade and factor mobility?," Empirical Economics, Springer, vol. 50(1), pages 103-136, February.
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    Cited by:

    1. Matteo Fiorini & Giorgia Giovannetti & Mauro Lanati & Filippo Santi, 2021. "Asymmetric cultural proximity and greenfield foreign direct investment," The World Economy, Wiley Blackwell, vol. 44(9), pages 2572-2603, September.

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    More about this item

    Keywords

    somatic distance; cultural interactions; trust; language; bilateral trade;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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