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Talking Trade: Language Barriers in Intra-Canadian Commerce

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Author Info
Nicolas Sauter

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Abstract

This paper tests for one mechanism that can explain the existence of a language barrier to trade. Specifically, I ask if those industries that require more cross-border communication in order to export their products trade more between Canadian provinces that know the other's language(s). I find that trade in industries with a need to communicate directly (orally) with importers increases with the probability that people in another province speak the same language. This finding can fill a missing link in the empirical trade literature, which lacked convincing arguments for the observed correlation between language commonality and the total volume of trade.

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Paper provided by FIW in its series FIW Working Paper series with number 023.

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Handle: RePEc:wsr:wpaper:y:2009:i:023

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Related research
Keywords: Language; Trade cost; Gravity model; Canada;

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Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
F15 - International Economics - - Trade - - - Economic Integration
F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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  5. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December. [Downloadable!] (restricted)
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  10. Hutchinson, William K, 2002. "Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 544-56, December. [Downloadable!] (restricted)
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  12. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate Of The Effect Of Common Currencies On Trade And Income," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 437-466, May. [Downloadable!] (restricted)
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  13. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," NBER Working Papers 5215, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05. [Downloadable!] (restricted)
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  15. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May. [Downloadable!] (restricted)
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  16. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 569-600, 05. [Downloadable!] (restricted)
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  17. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February. [Downloadable!] (restricted)
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  18. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc. [Downloadable!]
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  19. Joshua J. Lewer & Hendrik Van den Berg, 2007. "Estimating the Institutional and Network Effects of Religious Cultures on International Trade," Kyklos, Blackwell Publishing, vol. 60(2), pages 255-277, 05. [Downloadable!] (restricted)
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This page was last updated on 2009-11-17.

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