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Cultural Distance and International Trade in Services: A Disaggregate View

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  • Philipp Harms

    (Johannes Gutenberg University Mainz)

  • Daria Shuvalova

    (Johannes Gutenberg University Mainz)

Abstract

In this paper, we estimate the effect of “cultural distance” on bilateral trade in services. Our measure of cultural distance is based on the scores developed by the social psychologist Geert Hofstede, which reflect country averages of individuals’ attitude towards power, uncertainty, individualism etc. Controlling for other standard ingredients of gravity equations, we show that an aggregate measure of cultural distance has a significantly negative effect on total bilateral services trade. However, once we take a more disaggregate view, we find that the strength and sign of this effect differs across various aspects of culture and across various types of services.

Suggested Citation

  • Philipp Harms & Daria Shuvalova, 2016. "Cultural Distance and International Trade in Services: A Disaggregate View," Working Papers 1606, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    • Handle: RePEc:jgu:wpaper:1606
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    2. Lirong Xing & Xiaomiao Yin & Chuanxiang Cao & Ehsan Elahi & Taoyuan Wei, 2022. "The Impact of Multidimensional Distance on Agricultural Exports: Evidence from China Based on the Technological Added Value," Sustainability, MDPI, vol. 15(1), pages 1-17, December.
    3. Doanh, Nguyen Khanh & Gam, Nguyen Thi & Heo, Yoon, 2022. "The impact of intellectual property rights protection on trade: The role of a “third country” in market power and market expansion effects," Economic Systems, Elsevier, vol. 46(1).
    4. Shao Baorui & Zhang Zhiyuan & Li Zhao, 2024. "Currencies and culture: An amusing journey into the impacts of exchange rates on global creative industries," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(3), pages 647-672, May.
    5. Xiaomiao Yin & Lirong Xing & Chunxiao Cui, 2023. "The Impact of Multi-Dimensional Vectors on China’s Agricultural Products Export: Based on fsQCA," Agriculture, MDPI, vol. 13(9), pages 1-14, September.
    6. Liu, Ailan & Lu, Cuicui & Wang, Zhixuan, 2021. "Does cultural distance hinder exports?: A comparative study of China and the United States," Economic Modelling, Elsevier, vol. 105(C).
    7. Christine Côté & Saul Estrin & Daniel Shapiro, 0. "Expanding the international trade and investment policy agenda: The role of cities and services," Journal of International Business Policy, Palgrave Macmillan, vol. 0, pages 1-25.
    8. Christine Côté & Saul Estrin & Daniel Shapiro, 2020. "Expanding the international trade and investment policy agenda: The role of cities and services," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 199-223, September.

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    More about this item

    Keywords

    Trade in services; cultural distance; Hofstede scores; gravity equation;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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