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Foreign languages and trade: evidence from a natural experiment

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Abstract

Cultural factors and 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 quantile regressions. Copyright The Author(s) 2016

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  • Jan Fidrmuc & Jarko Fidrmuc, 2016. "Foreign languages and trade: evidence from a natural experiment," Empirical Economics, Springer, vol. 50(1), pages 31-49, February.
    • Handle: RePEc:spr:empeco:v:50:y:2016:i:1:p:31-49
    DOI: 10.1007/s00181-015-0999-7
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    7. Yang, Na & Zhang, Yuan & Yu, Lu & Wang, Jue & Liu, Xiaming, 2022. "Cross-border mergers and acquisitions, regional cultural diversity and acquirers’ corporate social responsibility: Evidence from China listed companies," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 565-578.
    8. Adhikari, Shweta & Poudel, Dikshit & Gopinath, Munisamy, 2023. "Is Policy Greasing the Wheels of Global Palm Oil Trade?," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 4(2), June.
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    10. Astghik Mavisakalyan & Clas Weber, 2018. "Linguistic Structures And Economic Outcomes," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 916-939, July.
    11. Dale-Olsen, Harald & Finseraas, Henning, 2019. "Linguistic Diversity and Workplace Productivity," IZA Discussion Papers 12621, Institute of Labor Economics (IZA).
    12. Astghik Mavisakalyan & Clas Weber, 2016. "Linguistic relativity and economics," Bankwest Curtin Economics Centre Working Paper series WP1605, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    13. Nazir Muhammad Abdullahi & Xuexi Huo & Qiangqiang Zhang & Aminah Bolanle Azeez, 2021. "Determinants and Potential of Agri-Food Trade Using the Stochastic Frontier Gravity Model: Empirical Evidence From Nigeria," SAGE Open, , vol. 11(4), pages 21582440211, December.
    14. ALHENDI Osama, 2019. "Language Policy And Economics: Does English Language Accelerate The Wheel Of Development In The Economies Or Not? A Review," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 366-379, December.
    15. Adhikari, Shweta & Poudel, Dikshit & Munisamy, Gopinath, 2023. "Policy Effects on Global Palm Oil Trade: A Gravity Model Approach," 2023 Annual Meeting, July 23-25, Washington D.C. 335475, Agricultural and Applied Economics Association.
    16. Woei, Tan Jiunn & Chin, Lee & Mohamed, Azali & Ismail, Normaz Wana, 2018. "The Impact of Various Trade Arrangements on Malaysia’s Bilateral Trade Costs," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(2), pages 69-80.
    17. Button, Kenneth & Martini, Gianmaria & Scotti, Davide & Volta, Nicola, 2019. "Airline regulation and common markets in Sub-Saharan Africa," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 81-91.
    18. Galina Besstremyannaya & Sergei Golovan, 2019. "Reconsideration of a simple approach to quantile regression for panel data: a comment on the Canay (2011) fixed effects estimator," Working Papers w0249, Center for Economic and Financial Research (CEFIR).
    19. Rindler, Michael, 2021. "Changing Language Skills and Trade in Europe," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242449, Verein für Socialpolitik / German Economic Association.
    20. Erick Kitenge & Sajal Lahiri, 2022. "Is the Internet bringing down language‐based barriers to international trade?," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 566-605, May.
    21. Omar Martin Fieles-Ahmad & Matthias Huber, 2021. "Learn German, Buy German? Language-learning opportunities abroad and exports," Jena Economics Research Papers 2021-008, Friedrich-Schiller-University Jena.
    22. Dale-Olsen, Harald & Finseraas, Henning, 2020. "Linguistic diversity and workplace productivity," Labour Economics, Elsevier, vol. 64(C).
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    24. Josep Ubalde & Amado Alarcón, 2020. "Are all automation-resistant skills rewarded? Linguistic skills in the US labour market," The Economic and Labour Relations Review, , vol. 31(3), pages 403-424, September.

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    More about this item

    Keywords

    Gravity model; Foreign trade; Economics of languages; Natural experiment; Median regression; Quantile regression; C23; F15; F40; Z10;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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