Foreign Languages and Trade

Jan Fidrmuc and Jarko Fidrmuc

No 4670, CESifo Working Paper Series from CESifo

Abstract: Cultural factors and especially common languages are well-known determinants of trade. By contrast, the knowledge of foreign languages was not explored in the literature so far. We combine traditional gravity models with data on fluency in the main languages used in EU and candidate countries. We show that widespread knowledge of languages is an important determinant for foreign trade, with English playing an especially important role. The robustness of our results is confirmed by a natural experiment of trade between Eastern and Western Europe.

Keywords: gravity model; foreign trade; economics of languages; natural experiment; median regression; quantile regression (search for similar items in EconPapers)
JEL-codes: C23 F15 F40 Z10 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Foreign Languages and Trade (2009)
Working Paper: Foreign Languages and Trade (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4670

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