earticle

영어

While linguistic differences impede international trade by creating communication barriers, linguistic heterogeneity is likely to facilitate trade for at least two reasons. First, the scope of comparative advantages will be wider in case the trading partners represent a linguistically heterogeneous environment as a whole. Second, linguistically heterogeneous countries will be more successful dealing with the communication barriers arising as a result of linguistic differences. Using a sample of East and South Asian economies we find empirical evidence in support of the two heterogeneity hypotheses, at the same time confirming the negative effect of linguistic differences found in earlier studies.