Linguistic distance as a variable of the gravity model for international trade: example of China
Keywords:
international trade, linguistic distance, gravity model of trade, communication costs, economy of language.
Abstract
This article investigates the role of linguistic distance on bilateral trade by using a set of indicators aimed to depict linguistic distance or proximity of China and its major trade partners. For this purpose, the gravity model that uses the linguistic distance as one of the elements of analysis and forecasting of bilateral trade is utilized. To achieve this goal, existing theories of the gravitational model are considered, the concept of linguistic distance is defined and its expediency to be included in the gravitational model justified. As a result, the impact of linguistic distance on bilateral trade is measured.References
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Poston, D. L., & Wong, J. H. (2016). The Chinese diaspora: The current distribution of the overseas Chinese population. Chinese Journal of Sociology, 2(3), 348–373. https://doi.org/10.1177/2057150X16655077
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Tinbergen, J. (1962) “Shaping the World Economy: An Analysis of World Trade Flows,” New York Twentieth Century Fund, Vol. 5, No. 1. – pp. 27-30.
Weidenbaum. M.L. & Hughes. S. (1996). The bamboo network: How expatriate Chinese entrepreneurs are creating a new economic superpower in Asia. New York: Martin Kessler Books.
International Trade Center. Official web-site. Retrieved March, 2020, from http://www.trademap.org
EF Education First. Official web-site. English Proficiency Index. Retrieved March, 2020, from http://www.ef.edu/epi/
World Bank. Official web-site. Retrieved March, 2020, from http://www.worldbank.org.
Confucius Institute Headquarters (Hanban). Official web-site. Retrieved March, 2020, from http://english.hanban.org/
CIA Factbook - The World Factbook. Official web-site. Retrieved March, 2020, from https://www.cia.gov/library/publications/the-world-factbook/
Chiswick, B., & Miller, P. (1994). Language Choice among Immigrants in a Multi-Lingual Destination. Journal of Population Economics, 7(2). – pp. 119-131.
Chiswick, B., & Miller, P. (2005). Linguistic Distance: A Quantitative Measure of the Distance Between English and Other Languages, Journal of Multilingual and Multicultural Development, 26:1. – pp. 1-11. doi: 10.1080/14790710508668395
Choi, E. Kwan (2002). "Trade and the adoption of a universal language," International Review of Economics & Finance, Elsevier, vol. 11(3). – pp. 265-275.
Fasih, F. (2018). Language as a Driver of Migration and Trade using the Gravity Model: A Comparative Analysis. Reprosentralen, Universitetet i Oslo.
Ferro, M. J., & Ribeiro, S. (2016). The role of language in international trade: How does language affect the choice of foreign trading partners? In S. Neves de Jesus, & P. Pinto (Eds.), Proceedings of the International Congress on Interdisciplinarity in Social and Human Sciences. – pp. 608-621.
Gil, J. (2017) Soft Power and the Worldwide Promotion of Chinese Language Learning: The Confucius Institute Project. Multilingual Matters.
Hartig, F. (2016). Chinese Public diplomacy: The rise of the Confucius Institute. London: Routledge.
Hutchinson, William K., (2005). “Linguistic Distance” as a Determinant of Bilateral Trade, Southern Economic Journal, 72, issue.
Isard, W. (May 1954). “Location Theory and Trade Theory: Short-Run Analysis”. Quarterly Journal of Economics. 68 (2). – pp. 305–320. doi: 10.2307/1884452
Isphording, I.E. and Otten, S. (2013). The Costs of Babylon. Review of International Economics, 21. – pp. 354-369. doi:10.1111/roie.12041
Lohmann, J. (2011). Do language barriers affect trade?, Economics Letters, 110, issue 2. – pp. 159-162.
Poston, D. L., & Wong, J. H. (2016). The Chinese diaspora: The current distribution of the overseas Chinese population. Chinese Journal of Sociology, 2(3), 348–373. https://doi.org/10.1177/2057150X16655077
Raihan, R (2006). The OLS Estimation of a basic gravity model. ARTNeT-GIZ Workshop on Introduction to Gravity Modelling for Trade Policy Analysis. Ulaanbaatar, Mongolia. Retrieved March 19, 2020, from https://www.unescap.org/sites/default/files/Day1_S3_Gravity_estimation_applyingOLS_0.pdf
Tinbergen, J. (1962) “Shaping the World Economy: An Analysis of World Trade Flows,” New York Twentieth Century Fund, Vol. 5, No. 1. – pp. 27-30.
Weidenbaum. M.L. & Hughes. S. (1996). The bamboo network: How expatriate Chinese entrepreneurs are creating a new economic superpower in Asia. New York: Martin Kessler Books.
International Trade Center. Official web-site. Retrieved March, 2020, from http://www.trademap.org
EF Education First. Official web-site. English Proficiency Index. Retrieved March, 2020, from http://www.ef.edu/epi/
World Bank. Official web-site. Retrieved March, 2020, from http://www.worldbank.org.
Confucius Institute Headquarters (Hanban). Official web-site. Retrieved March, 2020, from http://english.hanban.org/
CIA Factbook - The World Factbook. Official web-site. Retrieved March, 2020, from https://www.cia.gov/library/publications/the-world-factbook/
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Published
2020-04-30
How to Cite
Vlasenko, L. (2020). Linguistic distance as a variable of the gravity model for international trade: example of China. Fundamental and Applied Researches in Practice of Leading Scientific Schools, 38(2), 4-9. https://doi.org/https://doi.org/10.33531/farplss.2020.2.1
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