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"Linguistic Distance" as a Determinant of Bilateral Trade

Author

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  • William K. Hutchinson

    (Department of Economics, Vanderbilt University)

Abstract

We introduce a measure of language difficulty called "linguistic distance" into a modified gravity model to determine whether the fact that a language is further away from English affects the level of trade. Our sample of 36 non-English speaking countries includes Japan and South Korea, which we argue are special cases due to World War II, the Korean War, and subsequent close political and economic ties with the United States. Presence of a stock of immigrants in the home country has been shown to enhance trade, both exports and imports, with the country of origin. Controlling for network and information attributes provided by the presence of a stock of immigrants, the special relationship with Japan and Korea, and the standard gravity model variables, we find that the further a country�s primary language is from English, the lower trade will be between the United States and that country. These results hold for aggregate exports and imports as well as for exports and imports of consumer manufactures and producer manufactures.

Suggested Citation

  • William K. Hutchinson, 2001. ""Linguistic Distance" as a Determinant of Bilateral Trade," Vanderbilt University Department of Economics Working Papers 0130, Vanderbilt University Department of Economics, revised Oct 2003.
  • Handle: RePEc:van:wpaper:0130
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    References listed on IDEAS

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    Cited by:

    1. Victor Ginsburgh & Shlomo Weber, 2012. "Culture Languages and Economics," Working Papers ECARES ECARES 2012-009, ULB -- Universite Libre de Bruxelles.
    2. Ginsburgh, Victor & Weber, Shlomo, 2015. "Linguistic Distances and their Use in Economics," CEPR Discussion Papers 10640, C.E.P.R. Discussion Papers.
    3. Victor GINSBURGH & Shlomo WEBER, 2016. "Linguistic distances and ethnolinguistic fractionalization and disenfranchisement indices," LIDAM Reprints CORE 2855, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    Keywords

    Trade; information costs; immigration; gravity;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • J1 - Labor and Demographic Economics - - Demographic Economics

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