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Linguistic Distance and Market Integration in India

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  • Fenske, James
  • Kala, Namrata

Abstract

The role of cultural distance in market integration, particularly in the developing world, has received relatively little attention. Using prices from more than 200 South Asian markets spanning 1861 to 1921, we show that linguistic distance correlates negatively with market integration. A one-standard-deviation increase in linguistic distance predicts a reduction in the price correlation between two markets of 0.121 standard deviations for wheat, 0.181 for salt, and 0.088 for rice. While factors like genetic distance, literacy gaps, and railway connections are correlated with linguistic distance, they do not fully explain the correlation between linguistic distance and market integration.

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  • Fenske, James & Kala, Namrata, 2021. "Linguistic Distance and Market Integration in India," The Journal of Economic History, Cambridge University Press, vol. 81(1), pages 1-39, March.
    • Handle: RePEc:cup:jechis:v:81:y:2021:i:1:p:1-39_1
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    2. Fenske, James & Gupta, Bishnupriya & Yuan, Song, 2022. "Demographic Shocks and Women’s Labor Market Participation: Evidence from the 1918 Influenza Pandemic in India," The Journal of Economic History, Cambridge University Press, vol. 82(3), pages 875-912, September.
    3. Chilosi, David & Nikolic, Stefan, 2021. "Vanishing borders: ethnicity and trade costs at the origin of the Yugoslav market," SocArXiv fsmch, Center for Open Science.
    4. Guillaume Blanc & Masahiro Kubo, 2023. "French," Economics Discussion Paper Series 2308, Economics, The University of Manchester.
    5. Albers, Hakon & Pfister, Ulrich, 2023. "State formation and market integration: Germany, 1780–1830," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 403-421.
    6. Dincecco, Mark & Fenske, James & Gupta, Bishnupriya & Menon, Anil, 2024. "Conflict and Gender Norms," CAGE Online Working Paper Series 704, Competitive Advantage in the Global Economy (CAGE).
    7. Tahir Andrabi & Sheetal Bharat & Michael Kuehlwein, 2021. "Information And Price Convergence:Telegraphs In British India," BASE University Working Papers 04/2021, BASE University, Bengaluru, India.
    8. Qiliang, Mao & Xianzhuang, Mao, 2024. "The shaping of inter-regional industrial linkages by institutional and cultural division in China: Characteristics and differences," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1113-1132.

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