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Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade

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  • William K. Hutchinson

    (Department of Economics, Vanderbilt University)

Abstract

Gravity model explanations of trade volumes frequently include dummy variables to account for the commonality of language among trading partners. In this paper we use a data set for the number of people in a country who speak English as a first language or English as a second language (Crystal, 1997) as an indicator of the ease with which trade with the United States occurs. Controlling for commodity fixed effects we use SITC three digit industry data centered on 1995 United States bilateral trade with 33 countries to determine the effect of the degree of language commonality on bilateral trade. Both English as a first language and English as a second language are found to be more important for exports than for imports. This is true for all three digit industries as well as when the specific industry groups identified in Rauch (1999) are considere

Suggested Citation

  • William K. Hutchinson, 2002. "Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade," Vanderbilt University Department of Economics Working Papers 0217, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:0217
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Trade; gravity; language;
    All these keywords.

    JEL classification:

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

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