oaioai:CiteSeerX.psu:10.1.1.596.983

Why Do English-Speaking Countries Run a Trade Deficit? The Curse of Commercial Languages

Abstract

Abstract With the advance of globalization, English has become the language of commerce. While this lowers the trade costs for other countries, the opposite is not necessarily the case for English-speaking countries. This paper first provides empirical evidence that trade deficit is chronic in the US and in other English-speaking countries. It then compares the situation in countries where other commercial languages are the official language. Using a theoretically-grounded gravity model, it concludes that commercial language is a significant factor behind this phenomenon. Industry level analysis show support for this effect, which is more pronounced in industries where consumers prefer products with instructions or information. Such information is widely provided in major commercial languages

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oaioai:CiteSeerX.psu:10.1.1.596.983Last time updated on 10/29/2017

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