%0 Report %A Lameli, Alfred %A Nitsch, Volker %A Suedekum, Jens %A Wolf, Nikolaus %T Same Same But Different: Dialects and Trade %D 2013 %8 2013 May %I Institute of Labor Economics (IZA) %C Bonn %7 IZA Discussion Paper %N 7397 %U https://www.iza.org/publications/dp7397 %X Language is a strong and robust determinant of international trade patterns: Countries sharing a common language trade significantly more with each other than countries using different languages, holding other factors constant. In this paper, we show that this trade-promoting effect of language is likely to reflect cultural ties, rather than lower costs of communication or similar institutions. Analyzing unique data for a single-language country, Germany, we find that similarities in the local dialect between regions have a sizable and significant positive impact on intra-national trade. We interpret this finding as evidence for the effect of culture on trade. %K language %K culture %K trade costs %K gravity %K dialects