Cultural Differences and Bilateral Trade: An Empirical Study Based on Industrial Data from OECD and BRIICS Countries

Zao Sun; Yangzi Li; Pang Paul Wang

doi:10.1080/1540496X.2023.2195536

Cultural Differences and Bilateral Trade: An Empirical Study Based on Industrial Data from OECD and BRIICS Countries

Zao Sun, Yangzi Li, Pang Paul Wang

School of Accounting and Finance

Research output: Journal article publication › Journal article › Academic research › peer-review

3 Citations (Scopus)

Abstract

This study extends the cross-sectional gravity function in the Eaton and Kortum model to a panel-data model based on 36 OECD and six BRIICS countries from 2010 to 2018 and introduce heterogeneous technology to measure the competitiveness of each country by interaction fixed effects. The results illustrate that the total cultural distance between countries significantly impedes bilateral trade, as it increases trade costs. The conclusions are robust with instrumental variables, alternative measurement of cultural differences, and extended time window estimation. And the effects present heterogeneity in sub-dimensions of cultural distance and sub-industries.

Original language	English
Pages (from-to)	2787-2801
Number of pages	15
Journal	Emerging Markets Finance and Trade
Volume	59
Issue number	9
DOIs	https://doi.org/10.1080/1540496X.2023.2195536
Publication status	Published - 26 Apr 2023

Keywords

BRIICS countries
Bilateral trade
Eaton and Kortum model
OECD countries
cultural distances

ASJC Scopus subject areas

Economics, Econometrics and Finance(all)
Finance

More information

10.1080/1540496X.2023.2195536Licence: Unspecified

http://hdl.handle.net/10397/104631

Cite this

@article{9eee2d69efe7481a8bf3d8d1469221a1,

title = "Cultural Differences and Bilateral Trade: An Empirical Study Based on Industrial Data from OECD and BRIICS Countries",

abstract = "This study extends the cross-sectional gravity function in the Eaton and Kortum model to a panel-data model based on 36 OECD and six BRIICS countries from 2010 to 2018 and introduce heterogeneous technology to measure the competitiveness of each country by interaction fixed effects. The results illustrate that the total cultural distance between countries significantly impedes bilateral trade, as it increases trade costs. The conclusions are robust with instrumental variables, alternative measurement of cultural differences, and extended time window estimation. And the effects present heterogeneity in sub-dimensions of cultural distance and sub-industries.",

keywords = "BRIICS countries, Bilateral trade, Eaton and Kortum model, OECD countries, cultural distances",

author = "Zao Sun and Yangzi Li and Wang, {Pang Paul}",

note = "Publisher Copyright: {\textcopyright} 2023 Taylor & Francis Group, LLC.",

year = "2023",

month = apr,

day = "26",

doi = "10.1080/1540496X.2023.2195536",

language = "English",

volume = "59",

pages = "2787--2801",

journal = "Emerging Markets Finance and Trade",

issn = "1540-496X",

publisher = "M.E. Sharpe Inc.",

number = "9",

}

TY - JOUR

T1 - Cultural Differences and Bilateral Trade: An Empirical Study Based on Industrial Data from OECD and BRIICS Countries

AU - Sun, Zao

AU - Li, Yangzi

AU - Wang, Pang Paul

PY - 2023/4/26

Y1 - 2023/4/26

N2 - This study extends the cross-sectional gravity function in the Eaton and Kortum model to a panel-data model based on 36 OECD and six BRIICS countries from 2010 to 2018 and introduce heterogeneous technology to measure the competitiveness of each country by interaction fixed effects. The results illustrate that the total cultural distance between countries significantly impedes bilateral trade, as it increases trade costs. The conclusions are robust with instrumental variables, alternative measurement of cultural differences, and extended time window estimation. And the effects present heterogeneity in sub-dimensions of cultural distance and sub-industries.

AB - This study extends the cross-sectional gravity function in the Eaton and Kortum model to a panel-data model based on 36 OECD and six BRIICS countries from 2010 to 2018 and introduce heterogeneous technology to measure the competitiveness of each country by interaction fixed effects. The results illustrate that the total cultural distance between countries significantly impedes bilateral trade, as it increases trade costs. The conclusions are robust with instrumental variables, alternative measurement of cultural differences, and extended time window estimation. And the effects present heterogeneity in sub-dimensions of cultural distance and sub-industries.

KW - BRIICS countries

KW - Bilateral trade

KW - Eaton and Kortum model

KW - OECD countries

KW - cultural distances

UR - http://www.scopus.com/inward/record.url?scp=85156158736&partnerID=8YFLogxK

U2 - 10.1080/1540496X.2023.2195536

DO - 10.1080/1540496X.2023.2195536

M3 - Journal article

SN - 1540-496X

VL - 59

SP - 2787

EP - 2801

JO - Emerging Markets Finance and Trade

JF - Emerging Markets Finance and Trade

IS - 9

ER -

Cultural Differences and Bilateral Trade: An Empirical Study Based on Industrial Data from OECD and BRIICS Countries

Abstract

Keywords

ASJC Scopus subject areas

More information

Other files and links

Fingerprint

Cite this