Human Barriers to International Trade

Irene Fensore (), Stefan Legge () and Lukas Schmid ()

No 1712, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: This paper investigates whether the relatedness of populations across the world shapes international trade flows. Using data on common ancestry for 172 countries covering more than 99% of global trade, we document that country pairs with a larger ancestral distance are less likely to trade with each other (extensive margin) and, if they do trade, they trade fewer goods and smaller volumes (intensive margin). The results are robust to including a vast array of control variables capturing other sources of heterogeneity, including micro-geographic, political, linguistic, and religious differences. We discuss the role of several determinants of trade that lead to this negative relationship, namely differences in trust, values, consumption structures, political institutions, technology, as well as recent migration networks. Exploring the robustness of our findings, we use detailed census information on ancestry and show that U.S. states trade significantly more with ancestrally close countries.

Keywords: Ancestral Distance; Trade Barriers; Trade Flows (search for similar items in EconPapers)
JEL-codes: F14 F15 O33 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2017-09
New Economics Papers: this item is included in nep-gro and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:usg:econwp:2017:12

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