Foreign Languages and Trade Ryukoku University外语与贸易龙谷大学.pptVIP

Foreign Languages and Trade Introduction Impact of economic/monetary integration well explored Gravity models of trade Free-trade areas, customs unions and monetary unions increase trade Sharing the same language also increases trade Rose (2000): common language increases trade by 50%; cf. common currency increases trade by factor of 3 Introduction (cont’d) Common language facilitates communication and lowers costs Gravity models typically account only for official languages Effect of languages measured with dummy variables E.g. French official language in Canada Introduction (cont’d) Méli