Native language, spoken language, translation and trade

TLDR: In this paper, the authors construct new series for common native language and common spoken language for 195 countries, which they use together with series for the common official language and linguis-tic proximity in order to draw inferences about the aggregate impact of all linguistic factors on bilateral trade, whether the linguistic influences come from ethnicity and trust or ease of communication, and in so far they come from ease-of-communication, to what extent trans-lation and interpreters play a role.

Abstract: We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguis-tic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) whether the linguistic influences come from ethnicity and trust or ease of communication, and (3) in so far they come from ease of communication, to what extent trans-lation and interpreters play a role. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication is far more important than ethnicity and trust. Further, so far as ease of communication is at work, translation and inter-preters are extremely important. Finally, ethnicity and trust come into play largely because of immigrants and their influence is otherwise difficult to detect.