Arbeitspapier

Cultural proximity: a source of trade flow resilience?

While the significant influence of cultural proximity on bilateral trade flows has been extensively documented in the literature, its possible role in times of crisis has not yet been raised. Relying on a panel estimation of a gravity model incorporating cultural proximity parameters, we evidence the existence of a significant surge in the impact of the different components of cultural proximity during economic recession. The trade resilience among countries sharing a cultural bond is not a pure composition effect as it also appears within product categories. To understand this unexpected effect, we discuss different mechanisms that emphasize the potential mitigating influence of cultural proximity on some determinants of the trade collapse, namely the uncertainty shock, the increased moral hazard and the emergence of ethnocentric preferences.

Language
Englisch

Bibliographic citation
Series: FERDI Working Paper ; No. P201

Classification
Wirtschaft
Trade: General
Empirical Studies of Trade
Cultural Economics; Economic Sociology; Economic Anthropology: General
Subject
Bilateral trade
cultural proximity
financial crisis
trade resilience

Event
Geistige Schöpfung
(who)
Carrère, Céline
Masood, Maria
Event
Veröffentlichung
(who)
Fondation pour les études et recherches sur le développement international (FERDI)
(where)
Clermont-Ferrand
(when)
2017

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Carrère, Céline
  • Masood, Maria
  • Fondation pour les études et recherches sur le développement international (FERDI)

Time of origin

  • 2017

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