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Learn German, Buy German? Language-learning opportunities abroad and exports

Author

Listed:
  • Omar Martin Fieles-Ahmad

    (Otto von Guericke University Magdeburg)

  • Matthias Huber

    (Friedrich Schiller University Jena)

Abstract

Using data on the presence of the Goethe Institutes (GI) in 134 importer countries between 1978 and 2014, we study the effect that language learning opportunities abroad have on German exports. We employ a gravity model of trade with a single exporter and use the Poisson-Pseudo Maximum Likelihood (PPML) estimator to measure the relationship of interest. To gauge the importance of potential reverse causality, we also estimate the effect that institutes have on Swiss exports. Our findings for both Germany and German-speaking Swiss cantons show that institutes do stimulate exports to GI-hosting countries, but that this effect is confined to institutes offering language training services, which suggests that language requirements and acquisition underlie the positive link found between institutes and exports. This reading of our findings receives further support in additional explorations, where we study exports differentiated by Rauch (1999) product categories to account for differing communication requirements in trading.

Suggested Citation

  • Omar Martin Fieles-Ahmad & Matthias Huber, 2021. "Learn German, Buy German? Language-learning opportunities abroad and exports," Jena Economic Research Papers 2021-008, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2021-008
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    gravity model; foreign trade; language; cultural institute;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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