Cultural Links, Firm Heterogeneity and the Intensive and Extensive Margins of International Trade

23 Pages Posted: 6 Apr 2009

See all articles by Paulo Bastos

Paulo Bastos

World Bank; Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE); ISEG Lisbon School of Economics and Management,Universidade de Lisboa

Joana Silva

University of Nottingham

Date Written: November 1, 2008

Abstract

It is well known that cultural links between countries increase bilateral trade. In this paper we exploit Portuguese firm-level data on exports to 199 destinations to investigate the questions: How? Do cultural links increase the number of exporters, or the shipments per exporter? What is the role of firm heterogeneity? The results reveal that cultural links, measured by common language/colonial ties and emigrant communities, are significantly associated with a lower incidence of within-firm export zeros and with larger shipments per exporter. Furthermore, they show that the former of these relationships tends to be magnified by firm size, suggesting that firm heterogeneity is key in shaping the interplay between cultural links and the extensive margin of international trade.

Keywords: Colonial ties, migration, firm heterogeneity, intensive and extensive margins

JEL Classification: F1; F22

Suggested Citation

Bastos, Paulo and Silva, Joana, Cultural Links, Firm Heterogeneity and the Intensive and Extensive Margins of International Trade (November 1, 2008). Available at SSRN: https://ssrn.com/abstract=1373788 or http://dx.doi.org/10.2139/ssrn.1373788

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE) ( email )

Rua Miguel Lupi, 20
Lisboa, 1200-781
Portugal

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

Joana Silva

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
68
Abstract Views
651
Rank
603,475
PlumX Metrics