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Human Barriers to International Trade

Author

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  • Fensore, Irene

    ()

  • Legge, Stefan

    ()

  • Schmid, Lukas

    ()

Abstract

This paper investigates whether the relatedness of populations across the world shapes international trade flows. Using data on common ancestry for 172 countries covering more than 99% of global trade, we document that country pairs with a larger ancestral distance are less likely to trade with each other (extensive margin) and, if they do trade, they trade fewer goods and smaller volumes (intensive margin). The results are robust to including a vast array of control variables capturing other sources of heterogeneity, including micro-geographic, political, linguistic, and religious differences. We discuss the role of several determinants of trade that lead to this negative relationship, namely differences in trust, values, consumption structures, political institutions, technology, as well as recent migration networks. Exploring the robustness of our findings, we use detailed census information on ancestry and show that U.S. states trade significantly more with ancestrally close countries.

Suggested Citation

  • Fensore, Irene & Legge, Stefan & Schmid, Lukas, 2017. "Human Barriers to International Trade," Economics Working Paper Series 1712, University of St. Gallen, School of Economics and Political Science.
  • Handle: RePEc:usg:econwp:2017:12
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    File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1712.pdf
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    Cited by:

    1. Jaeggi, Adrian & Legge, Stefan & Schmid, Lukas, 2018. "Dyadic value distance: Determinants and consequences," Economics Letters, Elsevier, vol. 165(C), pages 48-53.
    2. Jacques Melitz & Farid Toubal, 2018. "Somatic Distance, Trust and Trade," Working Papers 2018-11, CEPII research center.

    More about this item

    Keywords

    Ancestral Distance; Trade Barriers; Trade Flows;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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