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The Impact of Socioeconomic and Cultural Differences on Online Trade

Author

Listed:
  • Daniel W. Elfenbein

    (Olin Business School, Washington University in St. Louis, St. Louis, Missouri 63130)

  • Raymond Fisman

    (Department of Economics, Boston University, Boston, Massachusetts 02215)

  • Brian McManus

    (Department of Economics CB 3305, University of North Carolina, Chapel Hill, North Carolina 27599)

Abstract

We use eBay data to investigate how within-U.S. trade is influenced by differences in socioeconomic characteristics. States’ similarity in cultural characteristics (ethnicity, religious affiliations, and political behavior) predicts online trade; cultural similarity similarly predicts trade within product categories. The culture-trade relationship is stronger for transactions with sellers who lack extensive reputations or certification, suggesting that consumers infer seller trustworthiness from cultural similarity. There is no correlation between cultural similarity and buyer satisfaction, suggesting that perceived differences in trustworthiness are not validated in actual transactions.

Suggested Citation

  • Daniel W. Elfenbein & Raymond Fisman & Brian McManus, 2023. "The Impact of Socioeconomic and Cultural Differences on Online Trade," Management Science, INFORMS, vol. 69(10), pages 6181-6201, October.
    • Handle: RePEc:inm:ormnsc:v:69:y:2023:i:10:p:6181-6201
    DOI: 10.1287/mnsc.2023.4681
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