Arbeitspapier

Foreign Languages and Trade

Cultural factors and especially common languages are well-known determinants of trade. By contrast, the knowledge of foreign languages was not explored in the literature so far. We combine traditional gravity models with data on fluency in the main languages used in EU and candidate countries. We show that widespread knowledge of languages is an important determinant for foreign trade, with English playing an especially important role. The robustness of our results is confirmed by a natural experiment of trade between Eastern and Western Europe.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 4670

Classification
Wirtschaft
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Economic Integration
Macroeconomic Aspects of International Trade and Finance: General
Cultural Economics; Economic Sociology; Economic Anthropology: General
Subject
gravity model
foreign trade
economics of languages
natural experiment
median regression
quantile regression

Event
Geistige Schöpfung
(who)
Fidrmuc, Jan
Fidrmuc, Jarko
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2014

Handle
Last update
20.09.2024, 8:24 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Fidrmuc, Jan
  • Fidrmuc, Jarko
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2014

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