Cultural Distance and International Trade

Jason Query () and Jon C. Thompson ()
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Jason Query: Western Washington University
Jon C. Thompson: Willamette University

Open Economies Review, 2024, vol. 35, issue 2, No 4, 283-300

Abstract: Abstract In this paper, we examine the trade impact of cultural distance using eight cultural characteristics: religion, the environment, family, the role of government, taxes, business views, trust, and worldviews. We find that distance on the trust and business dimensions are both statistically and economically significant determinants of trade. A one standard deviation increase in trust distance will decrease trade by the equivalent of a roughly 2.2% increase in geographic distance. A one standard deviation increase in business distance will decrease trade by the equivalent of a roughly 1% increase in geographic distance.

Keywords: Trade; Cultural distance; Gravity Model (search for similar items in EconPapers)
JEL-codes: F14 F15 O19 O24 Z13 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11079-023-09729-2

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