The Influence of Cultural Proximity on International Bilateral Trade – Evidence from different Levels of Regional Trade Agreements

  • 范 州平

Student thesis: Doctoral Thesis

Abstract

International trade is proved to benefit social welfare by supporting countries to utilize comparative advantages increase the economic growth and reduce the cost of functioning the economy Literature in International Business expected a negative effect of cultural distance as an obstacle on international bilateral trade but inharmonious results were shown Moreover none of the research has reviewed that relationship under the presence of Regional Trade Agreements which is believed to eliminate trade barriers This study applies gravity equation estimated by Poisson pseudo-maximum-likelihood technique with the objective to shed light on the aforementioned gap There 60 countries with the corresponding partners are investigated for a period from 2000 to 2016 in this study It is discovered that cultural distance has a curvilinear relationship with international bilateral trade which follows an inverted U-shape and this interrelation is fairly stable regardless of the level and effect of Regional Trade Agreements In addition the individual influence of each dimension in Hofstede’s theory of culture on bilateral trade is also confirmed The findings from this study suggest that the selection of trading partner should be the one with neither the closest nor the farthest distance in the national culture
Date of Award2019
Original languageEnglish
SupervisorMiin-Jye Wen (Supervisor)

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