IDEAS home Printed from https://ideas.repec.org/a/spr/epolin/v50y2023i3d10.1007_s40812-022-00238-w.html
   My bibliography  Save this article

The role of language in international trade and the “made in Italy”

Author

Listed:
  • Amir Maghssudipour

    (University of Florence)

  • Marco Bellandi

    (University of Florence)

  • Annalisa Caloffi

    (University of Florence)

Abstract

We investigate the relationship between language and trade, and we acknowledge language as both a code of communication and an important component of culture. We refer to the case of Italy where a large portion of export is related to the image of the “Made in Italy” (e.g., food of the Italian tradition, luxury cars, fashion clothes, etc.). In this context language is a means of conveying suggestions and symbols that become part of the goods themselves. Specifically, we study whether the presence of Italian as a migration language (proxied by the presence of migrants of Italian origin), Italian as a cultural language (proxied by the presence of students of Italian language), and proximity to the Italian language are associated with Italian exports. We implement a Poisson regression by pseudo-maximum likelihood on a database that includes 190 countries where Italy exports. Results show a positive association between Italian exports, including those of a conventionally defined core set of made in Italy sectors, with the presence of migrants of Italian origin and students in Italian cultural institutes. These findings are mainly driven by export towards high-income countries. The implications of these results for industrial policy are discussed.

Suggested Citation

  • Amir Maghssudipour & Marco Bellandi & Annalisa Caloffi, 2023. "The role of language in international trade and the “made in Italy”," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 677-702, September.
    • Handle: RePEc:spr:epolin:v:50:y:2023:i:3:d:10.1007_s40812-022-00238-w
    DOI: 10.1007/s40812-022-00238-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40812-022-00238-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40812-022-00238-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    2. Massimiliano Bratti & Luca Benedictis & Gianluca Santoni, 2014. "On the pro-trade effects of immigrants," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 557-594, August.
    3. Mariya Aleksynska & Giovanni Peri, 2014. "Isolating the Network Effect of Immigrants on Trade," The World Economy, Wiley Blackwell, vol. 37(3), pages 434-455, March.
    4. Marco Bellandi & Annalisa Caloffi & Amir Maghssudipour, 2021. "Is There a Price Premium on Typical Made-in-Italy Products? The Case of On-Line Wine Markets," L'industria, Società editrice il Mulino, issue 3, pages 429-445.
    5. 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.
    6. Anna Carbone & Federica Demaria & Roberto Henke, 2021. "The Sophistication of International Wine Trade: A New Import Measure," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(2), pages 199-218, July.
    7. Tiziano Squartini & Giorgio Fagiolo & Diego Garlaschelli, 2011. "Randomizing world trade. I. A binary network analysis," Papers 1103.1243, arXiv.org, revised Nov 2011.
    8. Oh, Chang Hoon & Travis Selmier, W. & Lien, Donald, 2011. "International trade, foreign direct investment, and transaction costs in languages," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 732-735.
    9. Massimiliano Bratti & Luca De Benedictis & Gianluca Santoni, 2020. "Immigrant entrepreneurs, diasporas, and exports," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 249-272, March.
    10. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    11. Roger White, 2007. "Immigrant-trade links, transplanted home bias and network effects," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 839-852.
    12. Thomas Verbeek & Alice Mah, 2020. "Integration and Isolation in the Global Petrochemical Industry: A Multiscalar Corporate Network Analysis," Economic Geography, Taylor & Francis Journals, vol. 96(4), pages 363-387, August.
    13. Antonella Bellino & Giuseppe Celi, 2019. "Disentangling the migration-trade nexus: the pro-trade effects of immigrants and emigrants in the presence of vertical and horizontal product differentiation," Applied Economics, Taylor & Francis Journals, vol. 51(33), pages 3665-3688, July.
    14. Felbermayr, Gabriel J. & Toubal, Farid, 2010. "Cultural proximity and trade," European Economic Review, Elsevier, vol. 54(2), pages 279-293, February.
    15. Valentina De Marchi & Joonkoo Lee & Gary Gereffi, 2014. "Globalization, Recession and the Internationalization of Industrial Districts: Experiences from the Italian Gold Jewellery Industry," European Planning Studies, Taylor & Francis Journals, vol. 22(4), pages 866-884, April.
    16. Egger, Peter H. & Lassmann, Andrea, 2012. "The language effect in international trade: A meta-analysis," Economics Letters, Elsevier, vol. 116(2), pages 221-224.
    17. Iranzo, Susana & Peri, Giovanni, 2009. "Migration and trade: Theory with an application to the Eastern-Western European integration," Journal of International Economics, Elsevier, vol. 79(1), pages 1-19, September.
    18. Victor Ginsburgh & Jacques Melitz & Farid Toubal, 2017. "Foreign Language Learning and Trade," Review of International Economics, Wiley Blackwell, vol. 25(2), pages 320-361, May.
    19. Tamara Gurevitch & Peter R. Herman & Farid Toubal & Yoto Yotov, 2020. "One Nation, One Language? Domestic Language Diversity, Trade and Welfare," Working Papers 2020-15, CEPII research center.
    20. Marina Murat & Barbara Pistoresi, 2009. "Migrant Networks: Empirical Implications for the Italian Bilateral Trade," International Economic Journal, Taylor & Francis Journals, vol. 23(3), pages 371-390.
    21. Lien, Donald & Co, Catherine Yap, 2013. "The effect of Confucius Institutes on US Exports to China: A state level analysis," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 566-571.
    22. Giovanni Canitano & Nicol? Bellanca, 2008. "Il made in Italy come immaginario collettivo. Un modello degli investimenti in stereotipi," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2008(3), pages 155-179.
    23. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    24. Silvia Sopranzetti, 2018. "The Italian Districts in the Global Value Chains," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(3), pages 497-522, November.
    25. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    26. Marco Bellandi & Daniela Campus & Alessandro Carraro & Erica Santini, 2020. "Accumulation of cultural capital at the intersection of socio-demographic features and productive specializations," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(1), pages 1-34, March.
    27. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    28. Sergio De Nardis & Fabrizio Traù, 1999. "Specializzazione settoriale e qualità dei prodotti: misure della pressione competitiva dell'industria italiana," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 177-212.
    29. Sergio Correia & Paulo Guimarães & Tom Zylkin, 2020. "Fast Poisson estimation with high-dimensional fixed effects," Stata Journal, StataCorp LP, vol. 20(1), pages 95-115, March.
    30. Yousaf Ali & Maurizio Ciaschini & Rosita Pretaroli & Claudio Socci, 2015. "Measuring the economic landscape of Italy: target efficiency and control effectiveness," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 297-321, September.
    31. Ivan Light, 2014. "Transnationals in an English-speaking world," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 23(1/2), pages 10-26.
    32. Valeria Gattai, 2015. "Internationalisation and performance at the firm-level: what we learn from Italy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(4), pages 475-509, December.
    33. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    34. Hillel Rapoport, 2018. "Diaspora externalities: A view from the South," WIDER Working Paper Series wp-2018-25, World Institute for Development Economic Research (UNU-WIDER).
    35. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1095-1131.
    36. Ling Wang & Jianqing Ruan, 2019. "Dialect, transaction cost and intra-national trade: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 51(57), pages 6113-6126, December.
    37. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    38. Burchell, Brendan & Wilkinson, Frank, 1997. "Trust, Business Relationships and the Contractual Environment," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(2), pages 217-237, March.
    39. William K. Hutchinson, 2002. "Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 544-556, November.
    40. Matteo Lucchese & Leopoldo Nascia & Mario Pianta, 2016. "Industrial policy and technology in Italy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(3), pages 233-260, September.
    41. Victor Ginsburgh & Shlomo Weber, 2011. "How Many Languages Do We Need? The Economics of Linguistic Diversity," Economics Books, Princeton University Press, edition 1, number 9481.
    42. Nick Clifton, 2011. "Regional Culture in the Market Place: Place Branding and Product Branding as Cultural Exchange," European Planning Studies, Taylor & Francis Journals, vol. 19(11), pages 1973-1994, June.
    43. Kristof Van Assche & Raoul Beunen & Eduardo Oliveira, 2020. "Spatial planning and place branding: rethinking relations and synergies," European Planning Studies, Taylor & Francis Journals, vol. 28(7), pages 1274-1290, July.
    44. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
    45. Luigi Benfratello & Davide Castellani & Anna D'Ambrosio, 2024. "Migration and the location of MNE activities: Evidence from Italian provinces," Journal of Regional Science, Wiley Blackwell, vol. 64(2), pages 428-461, March.
    46. Annalisa Caloffi, 2017. "System-based, light and complex: industrial and local development policies in the thought of Giacomo Becattini," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(4), pages 473-480, December.
    47. Lien, Donald & Lo, Melody, 2017. "Economic impacts of cultural institutes," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 12-21.
    48. Enzo Rullani & Claudio Cozza & Antonello Zanfei, 2016. "Lost in transition: systemic innovations and the new role of the state in industrial policy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(3), pages 345-353, September.
    49. repec:bla:scotjp:v:49:y:2002:i:5:p:544-56 is not listed on IDEAS
    50. Iranzo, Susana & Peri, Giovanni, 2009. "Migration and trade: Theory with an application to the Eastern-Western European integration," Journal of International Economics, Elsevier, vol. 79(1), pages 1-19, September.
    51. Matteo Lucchese & Leopoldo Nascia & Mario Pianta, 2016. "Industrial and technological policy. The case for Italy," Argomenti, University of Urbino Carlo Bo, Department of Economics, Society & Politics, vol. 4(4), pages 1-26, May-Augus.
    52. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amir Maghssudipour & Annalisa Caloffi & Marco Bellandi & Letizia Donati, 2022. "Language as a regional driver of the trade of place-sensitive products: The case of made-in-Italy goods," Working Papers - Economics wp2022_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    2. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    3. Anna D’Ambrosio & Sandro Montresor, 2022. "The pro-export effect of subnational migration networks: new evidence from Spanish provinces," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 53-107, February.
    4. Jeon, Doh-Shin & Jullien, Bruno & Klimenko, Mikhail, 2021. "Language, internet and platform competition," Journal of International Economics, Elsevier, vol. 131(C).
    5. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    6. Omar Martin Fieles‐Ahmad & Matthias Huber, 2022. "Learn German, Buy German? Language‐learning opportunities abroad and exports," The World Economy, Wiley Blackwell, vol. 45(10), pages 3031-3058, October.
    7. Firat Demir & Hyeonjin Im, 2020. "Effects of cultural institutes on bilateral trade and FDI flows: Cultural diplomacy or economic altruism?," The World Economy, Wiley Blackwell, vol. 43(9), pages 2463-2489, September.
    8. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    9. Yuheng Lin & Dooruj Rambaccussing & Yu Zhu, 2024. "The impact of international students in the UK on the cultural goods trade," French Stata Users' Group Meetings 2024 29, Stata Users Group.
    10. Magnus Lodefalk & Fredrik Sjöholm & Aili Tang, 2022. "International trade and labour market integration of immigrants," The World Economy, Wiley Blackwell, vol. 45(6), pages 1650-1689, June.
    11. 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.
    12. Falck, Oliver & Heblich, Stephan & Lameli, Alfred & Südekum, Jens, 2012. "Dialects, cultural identity, and economic exchange," Journal of Urban Economics, Elsevier, vol. 72(2), pages 225-239.
    13. Nicolas Sauter, 2012. "Talking trade: language barriers in intra-Canadian commerce," Empirical Economics, Springer, vol. 42(1), pages 301-323, February.
    14. Peter H. Egger & Andrea Lassmann, 2015. "The Causal Impact of Common Native Language on International Trade: Evidence from a Spatial Regression Discontinuity Design," Economic Journal, Royal Economic Society, vol. 0(584), pages 699-745, May.
    15. Sui, Sui & Morgan, Horatio M. & Baum, Matthias, 2015. "Internationalization of immigrant-owned SMEs: The role of language," Journal of World Business, Elsevier, vol. 50(4), pages 804-814.
    16. repec:edn:sirdps:417 is not listed on IDEAS
    17. Marina Murat, 2014. "Soft, hard or smart power? International students and investments abroad," Center for Economic Research (RECent) 107, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    18. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 4, pages 65-112, Edward Elgar Publishing.
    19. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    20. Walker, Sarah, 2018. "Cultural barriers to market integration: Evidence from 19th century Austria," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1122-1145.
    21. Marina Murat, 2014. "Soft, hard or smart power? International students and investments abroad," Department of Economics 0043, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

    More about this item

    Keywords

    Made in Italy; National culture; International trade; Italian language; Language and economics;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:epolin:v:50:y:2023:i:3:d:10.1007_s40812-022-00238-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.