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Distance, Transaction Costs, and Preferences in European Trade

PublikationArtikel (med peer review)
Ari Kokko, Eurovision Song Contest, Företagandets villkor, Gravity model, Internationell handel, Patrik Tingvall

Sammanfattning

Beckerman (1956) and Linder (1961) have suggested that international trade is not determined by supply-side factors alone—perceptions about foreign countries and country preferences matter. We explore the relation between exports, cultural distance, and country preferences in Europe. The results show that several distance and preference-related variables, based on Hofstede’s cultural dimensions, income gaps, and voting patterns in the Eurovision Song Contest, are significantly related to bilateral trade. We conclude that cultural distance and preferences influence trade through several channels, both indirectly through transaction costs and more directly, as countries seem to prefer some trade partners before others.

Related content: Working Paper No. 183

Kokko, A. & Gustavsson Tingvall, P. (2014). Distance, Transaction Costs, and Preferences in European Trade. The International Trade Journal, 28(2), 87-120. DOI: 10.1080/08853908.2013.830941

Baserat på innehåll

Distance, Transaction Costs, and Preferences in European Trade
Article (with peer review)Publikation
Kokko, A. & Gustavsson Tingvall, P.
Publiceringsår

2014

Sammanfattning

Beckerman (1956) and Linder (1961) have suggested that international trade is not determined by supply-side factors alone—perceptions about foreign countries and country preferences matter. We explore the relation between exports, cultural distance, and country preferences in Europe. The results show that several distance and preference-related variables, based on Hofstede’s cultural dimensions, income gaps, and voting patterns in the Eurovision Song Contest, are significantly related to bilateral trade. We conclude that cultural distance and preferences influence trade through several channels, both indirectly through transaction costs and more directly, as countries seem to prefer some trade partners before others.

Related content: Working Paper No. 183

Working Paper No. 183. The Eurovision Song Contest, Preferences and European Trade
Working paperPublikation
Kokko, A. & Gustavsson Tingvall, P.
Publiceringsår

2012

Publicerat i

Ratio Working Paper

Sammanfattning

Already Beckerman (1956) and Linder (1961) suggested that international trade is not determined by supply side factors alone – perceptions about foreign countries and country preferences matter. We explore the relation between exports, cultural distance, income differences and country preferences as revealed by voting in the European Song Contest. We conclude that preferences influence trade through several channels, and that results of the European Song Contest are a robust predictor of bilateral trade.

Working Paper No. 183. The Eurovision Song Contest, Preferences and European Trade
Working paperPublikation
Kokko, A. & Gustavsson Tingvall, P.
Publiceringsår

2012

Publicerat i

Ratio Working Paper

Sammanfattning

Already Beckerman (1956) and Linder (1961) suggested that international trade is not determined by supply side factors alone – perceptions about foreign countries and country preferences matter. We explore the relation between exports, cultural distance, income differences and country preferences as revealed by voting in the European Song Contest. We conclude that preferences influence trade through several channels, and that results of the European Song Contest are a robust predictor of bilateral trade.

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