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Foreign Languages and Trade

Author Info

Listed author(s):
  • Jan Fidrmuc
  • Jarko Fidrmuc

Abstract

Cultural factors and especially 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 a natural experiment of trade between Eastern and Western Europe.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2014/wp-cesifo-2014-02/cesifo1_wp4670.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4670.

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Date of creation: 2014
Handle: RePEc:ces:ceswps:_4670
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Keywords: gravity model; foreign trade; economics of languages; natural experiment; median regression; quantile regression;

Other versions of this item:

Find related papers by 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

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  1. Chiswick, Barry R. & Miller, Paul W., 2007. "Modeling Immigrants' Language Skills," IZA Discussion Papers 2974, Institute for the Study of Labor (IZA).
  2. Gilles Grenier & Serge Nadeau, 2011. "English as the Lingua Franca and the Economic Value of Other Languages: the Case of the Language of Work of Immigrants and Non-immigrants in the Montreal Labour Market," Working Papers 1107E, University of Ottawa, Department of Economics.
  3. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

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Cited by:

  1. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
  2. Brindusa Anghel & Antonio Cabrales & Jesus M. Carro, 2016. "Evaluating A Bilingual Education Program In Spain: The Impact Beyond Foreign Language Learning," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1202-1223, 04.
  3. Peter Egger & Andrea Lassmann, 2014. "Cultural Integration and Export Variety Overlap Across Countries," CESifo Working Paper Series 4800, CESifo Group Munich.
  4. repec:zbw:rwirep:0398 is not listed on IDEAS
  5. Paniagua, Jordi & Figueiredo, Erik & Sapena, Juan, 2015. "Quantile regression for the FDI gravity equation," Journal of Business Research, Elsevier, vol. 68(7), pages 1512-1518.
  6. Isphording, Ingo, 2013. "Returns to Local and Foreign Language Skills – Causal Evidence from Spain," Ruhr Economic Papers 398, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  7. Jarko Fidrmuc & Matus Senaj, 2012. "Human Capital, Consumption, and Housing Wealth in Transition," Working and Discussion Papers WP 2/2012, Research Department, National Bank of Slovakia.
  8. 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.
  9. Daria Ciriaci & Alessandro Muscio, 2011. "University choice, research quality and graduates' employability: Evidence from Italian national survey data," Working Papers 48, AlmaLaurea Inter-University Consortium.
  10. Ingo Isphording, 2013. "Returns to Local and Foreign Language Skills – Causal Evidence from Spain," Ruhr Economic Papers 0398, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  11. Helble, Matthias & Ngiang, Boon-Loong, 2014. "From Global Factory to Global Mall: East Asia’s Changing Trade Composition," ADBI Working Papers 496, Asian Development Bank Institute.

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