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Language and Foreign Trade

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  • Melitz, Jacques

Abstract

The significance of a common language in foreign trade hinges on translation as well as the ability to communicate directly. In fact, without admitting the facility of translation from one or two selected languages, it is impossible to explain adequately the impact of a common language on foreign trade. Linguistic diversity at home also promotes foreign trade. But the most significant linguistic influence of all on foreign trade is the ability to read and write any language whatever. Besides these basic results, the study examines three special issues: whether English and other European languages are more effective than other languages in promoting foreign trade; whether there are substitution effects of a common language in foreign trade; and whether network externalities of language impinge on foreign trade.

Suggested Citation

  • Melitz, Jacques, 2002. "Language and Foreign Trade," CEPR Discussion Papers 3590, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3590
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    More about this item

    Keywords

    foreign trade; gravity model; language;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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