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Same Same But Different: Dialects and Trade

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  • Lameli, Alfred
  • Nitsch, Volker
  • Südekum, Jens
  • Wolf, Nikolaus

Abstract

Language is a strong and robust determinant of international trade patterns: Countries sharing a common language trade significantly more with each other than countries using different languages, holding other factors constant. In this article we present the first analysis of the effect of language on trade in an intra-national context. Analyzing unique data for a single-language country, Germany, we find that similarities in the local dialect have a significantly positive impact on regional trade. We interpret this finding as evidence for the trade-promoting effect of culture, because linguistic similarities likely reflect cultural ties across regions, rather than lower costs of communication or similar institutions.

Suggested Citation

  • Lameli, Alfred & Nitsch, Volker & Südekum, Jens & Wolf, Nikolaus, 2015. "Same Same But Different: Dialects and Trade," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 76852, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:76852
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/76852/
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    File URL: http://onlinelibrary.wiley.com/doi/10.1111/geer.12047/abstract
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    References listed on IDEAS

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    1. Volker Nitsch & Nikolaus Wolf, 2013. "Tear down this wall: on the persistence of borders in trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 154-179, February.
    2. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    3. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    4. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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