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Cultural distance as a determinant of bilateral trade flows: do immigrants counter the effect of cultural differences?
Abstract
We introduce ‘cultural distance’ as a measure of the degree to which shared norms and values in one country differ from those in another country, and employ a modified gravity specification to examine whether such cultural differences affect the volume of trade flows. Employing data for US state-level exports to the 75 trading partners for which measures of cultural distance can be constructed, we find that greater cultural differences between the United States and a trading partner reduces state-level exports to that country. This result holds for aggregate exports, cultural and noncultural products exports as well, but with significantly different magnitudes. Immigrants are found to exert a pro-export effect that partially offsets the trade-inhibiting effects of cultural distance.
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“Cultural proximity is known to be a key determinant for economic flows for people, goods, financial investments in gravity models - people prefer to live with, trade with and invest in what is closer to their own identity (i.e. the home bias effect) (Tadesse and White 2010).”
From Artificial Intelligence (AI): Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy (2021) · cites this paper as Tadesse and White 2010
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Research works printed but not linked: 9
- Bandyopadhyay, S., Coughlin, C.C., and Wall, H.J. (2006) Ethnic Networks and US Exports, Federal Reserve Bank of St. Louis Working Paper 2005-069A · DOI
- Doz Y. L., 1998, Alliance Advantage: The Art of Creating Value through Partnering
- 10.1006/jjie.1994.1025 · DOI
- 10.1177/001872679404700404 · DOI
- 10.2307/136376 · DOI
- Hofstede G., 2001, Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations, Across Nations
- United States Department of Commerce, Bureau of the Census, 2006, Statistical Abstract of the United States: 2006
- Wagner D., 2002, Journal of Political Economy, 49, 507
- 10.1080/00036840500447849 · DOI
Cited by
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Dwivedi, Y. K., Hughes, L., Ismagilova, E., Aarts, G., Coombs, C., Crick, T., Duan, Y., Dwivedi, R., Edwards, J., Eirug, A., et al. (2021) · International Journal of Information Management · doi:10.1016/j.ijinfomgt.2019.08.002 · Cited by 4,611
Metadata
- Authors
- Tadesse, B., & White, R.
- Affiliations
- University of Minnesota, Duluth (US)
- Franklin & Marshall College (US)
- Corresponding author
- Tadesse, Bedassa
- Venue
- Applied Economics Letters
- Publisher
- Informa UK Limited
- Published
- 2008-04-28
- Volume
- 17
- Issue
- 2
- Pages
- 147-152
- ISSN
- 1350-4851 (ISSN-L)
- 1466-4291
- OpenAlex
- W2063462387
- Cited by
- 115
- References
- 0
- Citations by year
- 2026: 1 · 2025: 9 · 2024: 5 · 2023: 7 · 2022: 7 · 2021: 6 · 2020: 6 · 2019: 8 · 2018: 2 · 2017: 6 · 2016: 6 · 2015: 11 · 2014: 10 · 2013: 5 · 2012: 8
- FWCI
- 12.78
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Applied Economics Letters (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Development › Culture, Economy, and Development Studies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
- Keywords
- cultural distance, bilateral trade, trade flows, cultural differences, immigrants, gravity model, state-level exports, cultural products, United States exports
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- Tadesse, B., & White, R. (2010). Cultural distance as a determinant of bilateral trade flows: do immigrants counter the effect of cultural differences? Applied Economics Letters. https://doi.org/10.1080/13504850701719983
