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Foreign Languages and Trade

  • Fidrmuc, Jan
  • Fidrmuc, Jarko

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. Other languages (French, German, and Russian) play an important role mainly in particular regions. Furthermore, we argue that the effect of foreign languages on trade may be non-linear. The robustness of our results is confirmed by quantile regressions.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7228.

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Date of creation: Mar 2009
Handle: RePEc:cpr:ceprdp:7228
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