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Foreign Languages and Trade

  • Jan Fidrmuc

    ()

  • Jarko Fidrmuc

    ()

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

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Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 09-03.

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Length: 28 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:edb:cedidp:09-03
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