Research

Religion and International Trade: Does the Sharing of a Religious Culture Facilitate the Formation of Trade Networks?

Abstract Despite interest in the influence of religion on economic activity by early economists like Adam Smith, modern economists have done little research on the subject. In light of the apparent religious fervor in many parts of the global economy, economists' seeming lack of interest in studying how religious cultures enhance or retard the globalization of economic activity is especially surprising. This article makes a contribution toward filling this void by examining how religion affects international trade. Specifically, we examine whether the sharing of religious cultures enables the formation of exchange networks that can overcome the failure or nonexistence of other social and economic institutions necessary for completing complex international transactions. We apply an expanded gravity model of international trade to control for a variety of factors that determine trade, and we use two recently developed regression methods, scaled OLS and nonlinear least squares, to exploit the model to its fullest. We find that the sharing of Buddhist, Confucian, Hindu, Eastern Orthodox Catholic, and Protestant cultures by people in different countries has a significantly positive influence on bilateral trade, all other things equal. The sharing of Roman Catholic culture has a significantly negative influence on bilateral trade, and the sharing of Islamic and Judaic cultures neither promotes nor discourages international exchange. These results suggest that some religious cultures are more conducive than others for forming international trade networks.

http://onlinelibrary.wiley.com/doi/10.1111/j.1536-7150.2007.00539.x/full

Publication Information
Article Title: Religion and International Trade: Does the Sharing of a Religious Culture Facilitate the Formation of Trade Networks?
Journal: American Journal of Economics and Sociology (Oct, 2007)
66(4), 765-794
Author(s): van den Berg, Hendrik;  Lewer, Joshua J.
Researcher Information
    
van den Berg, Hendrik
van den Berg, Hendrik
Emeritus
Expertise:
  • Economic Development
  • Heterodox Economics
  • International Finance
  • Open-Economy Macroeconomics
Economics
HLH 523
P.O. Box 880489
University of Nebraska-Lincoln
Lincoln, NE 68588-0489, USA
Phone: (402) 472-2319
hvan-den-berg1@unl.edu