Distance, Transaction Costs, and Preferences in European Trade

Ari Kokko, Patrik Gustavsson Tingvall

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    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.
    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.
    LanguageEnglish
    JournalInternational Trade Journal
    Volume28
    Issue number2
    Pages87-120
    ISSN0885-3908
    DOIs
    StatePublished - 2014

    Keywords

    • International Trade
    • Psychic Distance
    • Country Preferences
    • Eurovision
    • Gravity model

    Cite this

    Kokko, Ari ; Tingvall, Patrik Gustavsson. / Distance, Transaction Costs, and Preferences in European Trade. In: International Trade Journal. 2014 ; Vol. 28, No. 2. pp. 87-120
    @article{14cad9c7c2a844ed808af7726174d29f,
    title = "Distance, Transaction Costs, and Preferences in European Trade",
    abstract = "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.",
    keywords = "International Trade, Psychic Distance, Country Preferences, Eurovision, Gravity model, International Trade, Psychic Distance, Country Preferences, Eurovision, Gravity model",
    author = "Ari Kokko and Tingvall, {Patrik Gustavsson}",
    year = "2014",
    doi = "10.1080/08853908.2013.830941",
    language = "English",
    volume = "28",
    pages = "87--120",
    journal = "International Trade Journal",
    issn = "0885-3908",
    publisher = "Taylor & Francis",
    number = "2",

    }

    Distance, Transaction Costs, and Preferences in European Trade. / Kokko, Ari; Tingvall, Patrik Gustavsson.

    In: International Trade Journal, Vol. 28, No. 2, 2014, p. 87-120.

    Research output: Contribution to journalJournal articleResearchpeer-review

    TY - JOUR

    T1 - Distance, Transaction Costs, and Preferences in European Trade

    AU - Kokko,Ari

    AU - Tingvall,Patrik Gustavsson

    PY - 2014

    Y1 - 2014

    N2 - 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.

    AB - 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.

    KW - International Trade

    KW - Psychic Distance

    KW - Country Preferences

    KW - Eurovision

    KW - Gravity model

    KW - International Trade

    KW - Psychic Distance

    KW - Country Preferences

    KW - Eurovision

    KW - Gravity model

    U2 - 10.1080/08853908.2013.830941

    DO - 10.1080/08853908.2013.830941

    M3 - Journal article

    VL - 28

    SP - 87

    EP - 120

    JO - International Trade Journal

    T2 - International Trade Journal

    JF - International Trade Journal

    SN - 0885-3908

    IS - 2

    ER -