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A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain

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  • Ferdinand Rauch
  • Matthias Beestermoller

Abstract

We show that the countries of the former Austro-Hungarian monarchy trade significantly more with one another in the aftermath of the collapse of the Iron Curtain than predicted by a standard gravity model. This trade surplus declines linearly and monotonically over time. We argue that these findings suggest that decaying cultural forces explain a significant part of trading capital. We document the rate of decay of these cultural forces.

Suggested Citation

  • 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.
    • Handle: RePEc:oxf:wpaper:718
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    Cited by:

    1. Anna Maria Koukal, 2017. "How Vatican II influenced female enfranchisement: A story of rapid cultural change," CREMA Working Paper Series 2017-07, Center for Research in Economics, Management and the Arts (CREMA).
    2. Christoph Hammer & Aurélien Fichet de Clairfontaine, 2016. "Trade Costs and Income in European Regions," Department of Economics Working Papers wuwp220, Vienna University of Economics and Business, Department of Economics.
    3. Polugodina, Maria & Grigoriadis, Theocharis, 2020. "East Prussia 2.0: Persistent regions, rising nations," Discussion Papers 2020/8, Free University Berlin, School of Business & Economics.
    4. Gunes Gokmen & Wessel N. Vermeulen & Pierre-Louis Vézina, 2020. "The imperial roots of global trade," Journal of Economic Growth, Springer, vol. 25(1), pages 87-145, March.

    More about this item

    Keywords

    Trade; Gravity; Culture; Borders; Habsburg Empire; Persistence;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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