Genetic distance, cultural differences, and the formation of regional trade agreements

Benedikt Heid and Wenxi Lu ()
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Wenxi Lu: Harbin Institute of Technology

Review of World Economics (Weltwirtschaftliches Archiv), 2022, vol. 158, issue 1, No 1, 23 pages

Abstract: Abstract Genetic distance between countries’ populations has been shown to proxy cross-country differences in cultures and preferences. In an unbalanced panel of 133 countries from 1970 to 2012, the study finds that higher genetic distance between two countries decreases their probability of having a trade agreement, even when controlling for geographic distance and other controls. The impact of cultural differences proxied by genetic distance is persistent over time and economically significant: While increasing the geographic distance between two countries by 1% decreases the probability of a regional trade agreement by 0.11% points, increasing their genetic distance by 1% decreases the probability by 0.06% points.

Keywords: Trade agreements; Trade policy; Trade negotiations; Genetic distance; Cultural differences (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 Z10 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: Genetic distance, cultural differences, and the formation of regional trade agreements (2020)
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DOI: 10.1007/s10290-021-00410-9

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