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Same Same But Different: Dialects and Trade

Author

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  • Lameli, Alfred

    (University of Marburg)

  • Nitsch, Volker

    (Darmstadt University of Technology)

  • Suedekum, Jens

    (Heinrich Heine University Düsseldorf)

  • Wolf, Nikolaus

    (Humboldt University Berlin)

Abstract

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.

Suggested Citation

  • Lameli, Alfred & Nitsch, Volker & Suedekum, Jens & Wolf, Nikolaus, 2013. "Same Same But Different: Dialects and Trade," IZA Discussion Papers 7397, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7397
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    References listed on IDEAS

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    1. Volker Nitsch & Nikolaus Wolf, 2013. "Tear down this wall: on the persistence of borders in trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 154-179, February.
    2. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    3. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    4. 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)

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    More about this item

    Keywords

    language; culture; trade costs; gravity; dialects;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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