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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

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    Cited by:

    1. Michele Fratianni & Francesco Marchionne, 2011. "The Limits to Integration," Chapters,in: International Handbook on the Economics of Integration, Volume I, chapter 9 Edward Elgar Publishing.
    2. Herrmann-Pillath, Carsten & Libman, Alexander & Yu, Xiaofan, 2014. "Economic integration in China: Politics and culture," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 470-492.
    3. Zhang, Daowei & Li, Yanshu, 2009. "Forest endowment, logging restrictions, and China's wood products trade," China Economic Review, Elsevier, vol. 20(1), pages 46-53, March.
    4. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670, April.
    5. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
    6. repec:eee:quaeco:v:64:y:2017:i:c:p:12-21 is not listed on IDEAS
    7. Roger White & Bedassa Tadesse, 2011. "International Migration and Economic Integration," Books, Edward Elgar Publishing, number 14318, April.
    8. Jan Fidrmuc & Jarko Fidrmuc, 2016. "Foreign languages and trade: evidence from a natural experiment," Empirical Economics, Springer, pages 31-49.

    More about this item

    Keywords

    Trade; gravity; language;

    JEL classification:

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

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