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15. Mai 2018

Endogenous language learning and international trade

Ein Vortrag von Michael Rindler (IOS Regensburg) im Rahmen der Seminarreihe des AB Ökonomie am IOS.
Datum: 15. Mai 2018
Zeit: 13.30 Uhr
Ort: Leibniz-Institut für Ost-und Südosteuropaforschung (IOS), Landshuter Str. 4 (Raum 109)

In recent years, the role of common language for international trade relations has caught the economist’s attention. This is due to the significance of language variables in the gravity model of trade. Still, the relationship between language and trade is not well understood. While a common spoken language can decrease trading costs, trade with foreigners might increases the incentives to learn their language. Ginsburgh, Melitz and Toubal (2017) made a first attempt to estimate the effect of international trade on foreign language learning in a worldwide cross-country study. I extend their work by tackling some issues that occurred in their paper. First, time-varying data on language is used to capture the dynamics of language learning. This hasn’t been done so far and as learning takes time, that way, some endogeneity problems can be relaxed. Second, the study focuses on Europe. The data captures some interesting changes in language learning in Eastern Europe, mainly from Russian to English. Additionally, in a worldwide sample, there are many countries in which the linguistic fractionalization is high, such that an international trade language serves as a lingua franca within the country as well. It is easier to solve for this problem of ambiguous incentives to learn a second language with European data, where there is only one predominant national language for most countries.