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One Nation, One Language? Domestic Language Diversity, Trade and Welfare

Author

Listed:
  • Tamara Gurevich
  • Peter R. Herman
  • Farid Toubal
  • Yoto V. Yotov
Abstract
Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated ‘home bias’, demonstrating the importance of shared languages for domestic integration. To highlight the general equilibrium implications of domestic language proximity, we simulate the repeal of Quebec’s Bill 101, which made French an official language in Canada and established fundamental language rights for French-speakers. The analysis demonstrates that domestic language diversity has significant implications for Canada’s welfare but also sizable economic consequences that stretch far beyond its borders.

Suggested Citation

  • Tamara Gurevich & Peter R. Herman & Farid Toubal & Yoto V. Yotov, 2021. "One Nation, One Language? Domestic Language Diversity, Trade and Welfare," CESifo Working Paper Series 8860, CESifo.
    • Handle: RePEc:ces:ceswps:_8860
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tamara Gurevitch & Peter R. Herman & Farid Toubal & Yoto Yotov, 2020. "One Nation, One Language? Domestic Language Diversity, Trade and Welfare," Working Papers 2020-15, CEPII research center.
    2. Felbermayr, Gabriel & Yotov, Yoto V., 2021. "From theory to policy with gravitas: A solution to the mystery of the excess trade balances," European Economic Review, Elsevier, vol. 139(C).
    3. Lionel Fontagné & Mathilde Lebrand & Siobhan Murray & Michele Ruta & Gianluca Santoni, 2023. "Trade and Infrastructure Integration in Africa," Working Papers 2023-14, CEPII research center.
    4. Klaus Desmet & Ignacio Ortuño-Ortín & Ömer Özak, 2022. "Is Secessionism Mostly About Income or Identity? A Global Analysis of 3,003 Subnational Regions," NBER Working Papers 30428, National Bureau of Economic Research, Inc.
    5. Amir Maghssudipour & Marco Bellandi & Annalisa Caloffi, 2023. "The role of language in international trade and the “made in Italy”," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 677-702, September.
    6. Stefania Miricola & Armando Rungi & Gianluca Santoni, 2023. "Ownership Chains in Multinational Enterprises," Papers 2305.12857, arXiv.org.
    7. Paniagua, Jordi & Peiró-Palomino, Jesús & Santana-Gallego, María, 2022. "Does happiness drive tourism decisions?," Economic Modelling, Elsevier, vol. 111(C).
    8. Yoto V. Yotov, 2021. "The Variation of Gravity within Countries (or 15 Reasons Why Gravity Should Be Estimated with Domestic Trade Flows)," CESifo Working Paper Series 9057, CESifo.
    9. Rosselló, Jaume & Santana-Gallego, María, 2024. "The effect of visa types on international tourism," Economic Modelling, Elsevier, vol. 137(C).
    10. Bradley, Sebastien & Flórez, Javier & Larch, Mario & Yotov, Yoto, 2024. "The Granular Trade and Production Activities (GRANTPA) Database," School of Economics Working Paper Series 2024-1, LeBow College of Business, Drexel University.
    11. Grohmann, Tobias, 2023. "Cultural similarity and migration: New evidence from a gravity model of international migration," GLO Discussion Paper Series 1349, Global Labor Organization (GLO).
    12. Yoto V. Yotov, 2022. "On the role of domestic trade flows for estimating the gravity model of trade," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 526-540, July.

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    More about this item

    Keywords

    common language; ethno-linguistic diversity; identity; international trade; domestic trade; domestic trade costs; welfare;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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