Talking Trade: Language Barriers in Intra-Canadian Commerce
FIW Working Paper No. 23
32 Pages Posted: 17 Aug 2010
Date Written: January 15, 2009
Abstract
This paper tests for one mechanism that can explain the existence of a language barrier to trade. Specifically, I ask if those industries that require more cross-border communication in order to export their products trade more between Canadian provinces that know the other's language(s). I find that trade in industries with a need to communicate directly (orally) with importers increases with the probability that people in another province speak the same language. This finding reveals a disadvantage for minority language regions in services trade.
Keywords: Language, Trade cost, Gravity model, Canada
JEL Classification: F10, F15, F40
Suggested Citation: Suggested Citation
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