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Cultural Integration and Export Variety Overlap Across Countries

Listed author(s):
  • Peter Egger
  • Andrea Lassmann

This paper assesses the role of a larger degree of common language use between the populations of two countries on the so-called extensive product margin of trade. We focus on the overlap of products exported or imported between any pair of countries. The results suggest that the effect of varying aspects of sharing a common language on the variety overlap is both positive and important. The effect of sharing a common spoken language exceeds the one of common native language, implying that a larger overlap in language proficiency is quantitatively more important than a higher cultural proximity.

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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-2014-05/cesifo1_wp4800.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4800.

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Date of creation: 2014
Handle: RePEc:ces:ceswps:_4800
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  1. Jacques Melitz & Farid Toubal, 2014. "Native language, spoken language, translation and trade," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01306641, HAL.
  2. Jan Fidrmuc & Jarko Fidrmuc, 2014. "Foreign Languages and Trade," CESifo Working Paper Series 4670, CESifo Group Munich.
  3. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
  4. Egger, Peter & Lassmann, Andrea, 2013. "The Causal Impact of Common Native Language on International Trade: Evidence from a Spatial Regression Discontinuity Design," CEPR Discussion Papers 9441, C.E.P.R. Discussion Papers.
  5. David E. Weinstein & Christian Broda, 2004. "Globalization And The Gains From Variety," Econometric Society 2004 Latin American Meetings 327, Econometric Society.
  6. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
  7. Felbermayr, Gabriel J. & Toubal, Farid, 2010. "Cultural proximity and trade," European Economic Review, Elsevier, vol. 54(2), pages 279-293, February.
  8. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1095-1131.
  9. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d'Agliano, University of Milano.
  10. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
  11. Falck, Oliver & Heblich, Stephan & Lameli, Alfred & Sudekum, Jens, 2011. "Dialects, Cultural Identity, and Economic Exchange," Stirling Economics Discussion Papers 2011-01, University of Stirling, Division of Economics.
  12. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
  13. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  14. Jeffrey M. Wooldridge, 2001. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232197.
  15. Davis, Peter, 2002. "Estimating multi-way error components models with unbalanced data structures," Journal of Econometrics, Elsevier, vol. 106(1), pages 67-95, January.
  16. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2011. "The Trade Effects of Endogenous Preferential Trade Agreements," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 113-143, August.
  17. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
  18. Egger, Peter H. & Lassmann, Andrea, 2012. "The language effect in international trade: A meta-analysis," Economics Letters, Elsevier, vol. 116(2), pages 221-224.
  19. Terza, Joseph V. & Basu, Anirban & Rathouz, Paul J., 2008. "Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling," Journal of Health Economics, Elsevier, vol. 27(3), pages 531-543, May.
  20. Kang, Suk, 1985. "A note on the equivalence of specification tests in the two-factor multivariate variance components model," Journal of Econometrics, Elsevier, vol. 28(2), pages 193-203, May.
  21. Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
  22. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2006. "Does Culture Affect Economic Outcomes?," CEPR Discussion Papers 5505, C.E.P.R. Discussion Papers.
  23. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
  24. repec:hal:journl:halshs-00641280 is not listed on IDEAS
  25. Feenstra, Robert & Kee, Hiau Looi, 2008. "Export variety and country productivity: Estimating the monopolistic competition model with endogenous productivity," Journal of International Economics, Elsevier, vol. 74(2), pages 500-518, March.
  26. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
  27. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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