Type: Working Paper
Product-based cultural change : is the village global?
Working Paper, CEPR Discussion Paper, 2009/7438
MAYSTRE, Nicolas, OLIVIER, Jacques, THOENIG, Mathias, VERDIER, Thierry, Product-based cultural change : is the village global?, CEPR Discussion Paper, 2009/7438 - https://hdl.handle.net/1814/42320
Retrieved from Cadmus, EUI Research Repository
This paper makes three contributions to the growing literature on culture and economics. Using answers to the World Values Survey for a sample of 79 countries over the 1989-2004 period, we first provide evidence of cultural homogenization between countries. Second, we provide a model of product-based cultural change. Our main theoretical predictions are: (i) bilateral trade openness reduces bilateral cultural distance; (ii) the more differentiated the products, the more trade reduces cultural distance; (iii) trade openness has a lock-in effect on culture. Third, we test the model using an instrumental variable approach and including various time and country-pair fixed effects. We find that a one standard deviation increase in bilateral trade openness translates into a 43% standard deviation decrease in bilateral cultural distance.
Cadmus permanent link: https://hdl.handle.net/1814/42320
Series/Number: CEPR Discussion Paper; 2009/7438
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