published in: German Economic Review, 2015, 16 (3), 290-306
Language is a strong and robust determinant of international trade patterns: Countries sharing a common language trade significantly more with each other than countries using different languages, holding other factors constant. In this paper, we show that this trade-promoting effect of language is likely to reflect cultural ties, rather than lower costs of communication or similar institutions. Analyzing unique data for a single-language country, Germany, we find that similarities in the local dialect between regions have a sizable and significant positive impact on intra-national trade. We interpret this finding as evidence for the effect of culture on trade.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.