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Same Same But Different: Dialects and Trade

Author

Listed:
  • Lameli, Alfred

    () (University of Marburg)

  • Nitsch, Volker

    () (Darmstadt University of Technology)

  • Suedekum, Jens

    () (Heinrich Heine University Düsseldorf)

  • Wolf, Nikolaus

    () (Humboldt University Berlin)

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 paper, we show that this trade-promoting effect of language is likely to reflect cultural ties, rather than lower costs of communication or similar institutions. Analyzing unique data for a single-language country, Germany, we find that similarities in the local dialect between regions have a sizable and significant positive impact on intra-national trade. We interpret this finding as evidence for the effect of culture on trade.

Suggested Citation

  • Lameli, Alfred & Nitsch, Volker & Suedekum, Jens & Wolf, Nikolaus, 2013. "Same Same But Different: Dialects and Trade," IZA Discussion Papers 7397, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7397
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    References listed on IDEAS

    as
    1. Volker Nitsch & Nikolaus Wolf, 2013. "Tear down this wall: on the persistence of borders in trade," Canadian Journal of Economics, Canadian Economics Association, 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, Oxford University Press, 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.
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    Cited by:

    1. Delina E. Agnosteva & James E. Anderson & Yoto V. Yotov, 2014. "Intra-national Trade Costs: Measurement and Aggregation," NBER Working Papers 19872, National Bureau of Economic Research, Inc.
    2. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2016. "Language and consumption," China Economic Review, Elsevier, vol. 40(C), pages 135-151.
    3. Ferdinand Rauch & Matthias Beestermoller, 2014. "A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain," Economics Series Working Papers 718, University of Oxford, Department of Economics.
    4. Vitola, Alise & Grigoriadis, Theocharis, 2018. "Diversity & empire: Baltic Germans & comparative development," Discussion Papers 2018/6, Free University Berlin, School of Business & Economics.
    5. Thilo R. Huning & Fabian Wahl, 2016. "You Reap What You Know: Observability of Soil Quality, and Political Fragmentation," Working Papers 0101, European Historical Economics Society (EHES).
    6. repec:iza:izawol:journl:2018:n:414 is not listed on IDEAS

    More about this item

    Keywords

    language; culture; trade costs; gravity; dialects;

    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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