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One Nation, One Language? Domestic Language Diversity, Trade and Welfare

Tamara Gurevitch, Peter Herman, Farid Toubal and Yoto Yotov

Working Papers from CEPII research center

Abstract: Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated `home bias', demonstrating the importance of shared languages for domestic integration. To highlight the general equilibrium implications of domestic language proximity, we simulate the repeal of Quebec's Bill 101, which made French an official language in Canada and established fundamental language rights for Frenchspeakers. The analysis demonstrates that domestic language diversity has significant implications for Canada's welfare but also sizable economic consequences that stretch far beyond its borders.

Keywords: Common Language; Ethno-linguistic Diversity; Identity; International Trade; Domestic Trade; Domestic Trade Costs; Welfare (search for similar items in EconPapers)
JEL-codes: C54 D60 F14 F19 Z13 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-int
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Working Paper: One Nation, One Language? Domestic Language Diversity, Trade and Welfare (2021) Downloads
Working Paper: One Nation, One Language? Domestic Language Diversity, Trade and Welfare (2021) Downloads
Working Paper: One Nation, One Language? Domestic Language Diversity, Trade and Welfare (2021) Downloads
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