IDEAS home Printed from https://ideas.repec.org/a/wly/intsec/v18y2023i1p80-96.html

Does a Lingua Franca matter in bilateral international trade?

Author

Listed:
  • Li Su
  • Hojin Jung
  • Mingzhuo Yang

Abstract

This article explores the impact of language proficiency on international trade by using panel data analysis. To do so, we construct a time‐variant test‐score‐based measure of common language. Controlling for the standard gravity model variables, we find strong empirical evidence that English proficiency promotes bilateral trade flows through facilitating direct communication. We confirm that this finding is robust even when we estimate its effects separately on goods and services trade flows at a disaggregated level. Furthermore, we show that institutional similarities between trading partners play a role that is similar to communication easiness in trade. Our study provides a policy implication for government support for attaining second language fluency.

Suggested Citation

  • Li Su & Hojin Jung & Mingzhuo Yang, 2023. "Does a Lingua Franca matter in bilateral international trade?," International Studies of Economics, John Wiley & Sons, vol. 18(1), pages 80-96, March.
    • Handle: RePEc:wly:intsec:v:18:y:2023:i:1:p:80-96
    DOI: 10.1002/ise3.23
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ise3.23
    Download Restriction: no
    File URL: https://libkey.io/10.1002/ise3.23?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tomasz Brodzicki & Stanislaw Uminski, 2018. "A gravity panel data analysis of foreign trade by regions: the role of metropolises and history," Regional Studies, Taylor & Francis Journals, vol. 52(2), pages 261-273, February.
    2. Roger Hosein & Leera Boodram & George Saridakis, 2022. "The impact of Spanish immigrants on the Trinidad and Tobago’s economy: can Spanish as a second language promote trade?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 31(1), pages 136-159, January.
    3. Baier, Scott L. & Yotov, Yoto V. & Zylkin, Thomas, 2019. "On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration," Journal of International Economics, Elsevier, vol. 116(C), pages 206-226.
    4. Richard Baldwin, 2007. "Trade Effects of the Euro: a Comparison of Estimators," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 780-818.
    5. William K. Hutchinson, 2002. "Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade," Vanderbilt University Department of Economics Working Papers 0217, Vanderbilt University Department of Economics.
    6. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    7. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    8. Lin Sun & Michael R. Reed, 2010. "Impacts of Free Trade Agreements on Agricultural Trade Creation and Trade Diversion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(5), pages 1351-1363.
    9. Firat Demir & Hyeonjin Im, 2020. "Effects of cultural institutes on bilateral trade and FDI flows: Cultural diplomacy or economic altruism?," The World Economy, Wiley Blackwell, vol. 43(9), pages 2463-2489, September.
    10. 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.
    11. Jan Fidrmuc & Jarko Fidrmuc, 2016. "Foreign languages and trade: evidence from a natural experiment," Empirical Economics, Springer, vol. 50(1), pages 31-49, February.
    12. William K. Hutchinson, 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 544-556, November.
    13. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
    14. Yeming Gong, 2013. "Global Operations Strategy," Springer Texts in Business and Economics, Springer, edition 127, number 978-3-642-36708-3, January.
    15. Yeming Gong, 2013. "Global Operations Strategy : Fundamentals and Practice," Post-Print hal-02298186, HAL.
    16. William K. Hutchinson, 2005. "“Linguistic Distance” as a Determinant of Bilateral Trade," Southern Economic Journal, John Wiley & Sons, vol. 72(1), pages 1-15, July.
    17. Mariko Nakagawa & Shonosuke Sugasawa, 2022. "Linguistic distance and economic development: A cross‐country analysis," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 793-834, May.
    18. Peter H. Egger & Andrea Lassmann, 2015. "The Causal Impact of Common Native Language on International Trade: Evidence from a Spatial Regression Discontinuity Design," Economic Journal, Royal Economic Society, vol. 0(584), pages 699-745, May.
    19. repec:bla:scotjp:v:49:y:2002:i:5:p:544-56 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Lin & Chen, Kai, 2025. "The impact of trade liberalization on China–ASEAN trade relations along the belt and road: An augmented gravity model analysis," Finance Research Letters, Elsevier, vol. 71(C).
    2. Strango, Cristina & Mutascu, Mihai & Hegerty, Scott W., 2025. "Does English proficiency promote international trade?," International Economics, Elsevier, vol. 183(C).
    3. Zhang, Yuanyuan & Sun, Wenli & Du, Yaning, 2024. "Lingua franca proficiency and cross-border mergers and acquisitions: Language matters," Finance Research Letters, Elsevier, vol. 66(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oh, Chang Hoon & Travis Selmier, W. & Lien, Donald, 2011. "International trade, foreign direct investment, and transaction costs in languages," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 732-735.
    2. Jan Fidrmuc & Jarko Fidrmuc, 2009. "Foreign Languages and Trade," CEDI Discussion Paper Series 09-03, Centre for Economic Development and Institutions(CEDI), Brunel University.
    3. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
    4. Jan Fidrmuc & Jarko Fidrmuc, 2016. "Foreign languages and trade: evidence from a natural experiment," Empirical Economics, Springer, vol. 50(1), pages 31-49, February.
    5. Marie M Stack & Rob Ackrill & Martin Bliss, 2019. "Sugar trade and the role of historical colonial linkages," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(1), pages 79-108.
    6. 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.
    7. Sabeer, Vadakke Cholakkakath, 2025. "International migration and trade: A comparative analysis of China and India," Journal of Asian Economics, Elsevier, vol. 100(C).
    8. Helene Tenzer & Siri Terjesen & Anne-Wil Harzing, 2017. "Language in International Business: A Review and Agenda for Future Research," Management International Review, Springer, vol. 57(6), pages 815-854, December.
    9. Mario Larch & Jeff Luckstead & Yoto V. Yotov, 2024. "Economic sanctions and agricultural trade," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(4), pages 1477-1517, August.
    10. Jacques Simon Song & Hervé William Mougnol A Ekoula, 2025. "Does Financial Integration Contribute to Bilateral Trade in Africa: An Empirical Investigation by the Augmented Gravity Model," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(3), pages 12078-12117, September.
    11. Strango, Cristina & Mutascu, Mihai & Hegerty, Scott W., 2025. "Does English proficiency promote international trade?," International Economics, Elsevier, vol. 183(C).
    12. Timsina, Krishna P. & Culas, Richard J., . "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3).
    13. Lien, Donald & Oh, Chang Hoon & Selmier, W. Travis, 2012. "Confucius institute effects on China's trade and FDI: Isn't it delightful when folks afar study Hanyu?," International Review of Economics & Finance, Elsevier, vol. 21(1), pages 147-155.
    14. Peter R. Herman, 2022. "Correction to: Modeling complex network patterns in international trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(2), pages 713-714, May.
    15. Firat Demir & Hyeonjin Im, 2020. "Effects of cultural institutes on bilateral trade and FDI flows: Cultural diplomacy or economic altruism?," The World Economy, Wiley Blackwell, vol. 43(9), pages 2463-2489, September.
    16. Amy H. Liu & Megan Roosevelt & Sarah Wilson Sokhey, 2017. "Trade and the Recognition of Commercial Lingua Francas: Russian Language Laws in Post-Soviet Countries," Economics and Politics, Wiley Blackwell, vol. 29(1), pages 48-68, March.
    17. Pascal L. Ghazalian, 2019. "Canada's beef exports: Border effects and prospects for market access," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(1), pages 53-74, March.
    18. Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    19. Krishna P. Timsina & Richard J. Culas, 2020. "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 889-919, July.
    20. Amir Maghssudipour & Annalisa Caloffi & Marco Bellandi & Letizia Donati, 2022. "Language as a regional driver of the trade of place-sensitive products: The case of made-in-Italy goods," Working Papers - Economics wp2022_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:intsec:v:18:y:2023:i:1:p:80-96. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.