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“Linguistic Distance” as a Determinant of Bilateral Trade


  • William K. Hutchinson

    () (Department of Economics, Vanderbilt University)


We introduce a measure of language difficulty called “linguistic distance” into a modified gravity model to determine whether a language being further away from English affects the level of trade. Our sample of 36 non–English-speaking countries includes Japan and South Korea, which we argue are special cases because of World War II, the Korean War, and subsequent close political and economic ties with the United States. Presence of a stock of immigrants in the home country has been shown to enhance trade with the country of origin. Controlling for immigrant network and information attributes, the special relationship with Japan and Korea, and the standard gravity model variables, we find that trade will be less between the United States and a country the further that country's language is from English. These results hold for aggregate exports and imports and for exports and imports of consumer and producer manufactures.

Suggested Citation

  • William K. Hutchinson, 2005. "“Linguistic Distance” as a Determinant of Bilateral Trade," Southern Economic Journal, Southern Economic Association, vol. 72(1), pages 1-15, July.
  • Handle: RePEc:sej:ancoec:v:72:1:y:2005:p:1-15

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    References listed on IDEAS

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    Cited by:

    1. Antonio Di Paolo & Aysit Tansel, 2015. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Journal of Development Studies, Taylor & Francis Journals, vol. 51(4), pages 407-421, April.
    2. Wang, Yongjin & Wang, Yanling & Li, Kunwang, 2014. "Judicial quality, contract intensity and exports: Firm-level evidence," China Economic Review, Elsevier, vol. 31(C), pages 32-42.
    3. Contractor, Farok & Yang, Yong & Gaur, Ajai S., 2016. "Firm-specific intangible assets and subsidiary profitability: The moderating role of distance, ownership strategy and subsidiary experience," Journal of World Business, Elsevier, vol. 51(6), pages 950-964.
    4. James Foreman-Peck & Peng Zhou, 2015. "Firm-Level Evidence for the Language Investment Effect on SME Exporters," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(4), pages 351-377, September.
    5. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    6. Cyrus Teresa L., 2012. "Cultural Distance and Bilateral Trade," Global Economy Journal, De Gruyter, vol. 12(4), pages 1-25, December.
    7. Fenske, James & Kala, Namrata, 2017. "Linguistic Distance and Market Integration in India," CAGE Online Working Paper Series 331, Competitive Advantage in the Global Economy (CAGE).
    8. Tenzer, Helene & Terjesen, Siri & Harzing, Anne-wil, 2017. "Language in international business : A review and agenda for future research," Other publications TiSEM 8afd108a-9666-4fbb-934f-6, Tilburg University, School of Economics and Management.
    9. Murat, Marina, 2014. "Out of Sight, Not Out of Mind. Education Networks and International Trade," World Development, Elsevier, vol. 58(C), pages 53-66.
    10. Galina Shirokova & Patricia McDougall-Covin, 2012. "The role of social networks and institutions in the internationalization of Russian entrepreneurial firms: Do they matter?," Journal of International Entrepreneurship, Springer, vol. 10(3), pages 177-199, September.
    11. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
    12. Muravyev, Alexander & Talavera, Oleksandr, 2016. "Can state language policies distort students’ demand for education?," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 383-399.
    13. 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.
    14. Egger, Peter & Nelson, Doug R & von Ehrlich, Maximilian, 2012. "The Trade Effects of Skilled versus Unskilled Migration," CEPR Discussion Papers 9053, C.E.P.R. Discussion Papers.
    15. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0319-x is not listed on IDEAS
    16. repec:edn:sirdps:417 is not listed on IDEAS

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • J1 - Labor and Demographic Economics - - Demographic Economics


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