v17_2006l - On the Inuence of World Religions on...

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209 On the In f uence of World Religions on International Trade 11 O N THE I NFLUENCE OF W ORLD R ELIGIONS ON I NTERNATIONAL T RADE Matthias Helble As the world economy is integrating, trade between countries is growing rapidly. The exchange of goods not only has an eco- nomic, but also a cultural dimension. This paper investigates the possible ways that religion inF uences international trade patterns. It studies the view of the ± ve world religions, namely Hinduism, Judaism, Buddhism, Christianity, and Islam, on economic activity, and trade in particular. Analyzing empirically trade F ows between 151 countries, the paper ± nds an impact of religion on trade. ²urthermore, the results indicate that religious openness boosts trade performance of countries. Given these results, the paper derives several policy recommendations. 1 I NTRODUCTION The individual person is at the origin of all economic activity. The indi- vidual’s personal and cultural traits decide how and with whom he or she interacts economically. Whereas personal characteristics may be assumed to be purely random, cultural traits are not; the latter may have an important impact on economic behavior. The economic behavior we are focusing on in this paper concerns international trade. With an annual growth rate of around 6 percent, world trade is one of the major engines of globalization. Even though the number of trading relationships seems to remain stable (Helpman et al. 2005), more and more goods are being exchanged. The exchange of goods does not stand by itself and always takes place in a cultural context. Therefore, the more goods are exchanged between Matthias Helble is a Ph.D. candidate in International Relations at the Graduate Institute of International Studies, Geneva and at Yale University ([email protected]).
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210 Matthias Helble countries the more inter-cultural interaction between trading partners is necessary. Some authors argue that globalization brings down cultural dif- ferences (Barber 1995). However, over the recent years we have witnessed a surge in conF icts that have been fought over cultural rather than political- ideological issues (Huntington 1996). ±urthermore, a globalizing world does not only create opportunities, but also fears. One of the strongest fears concerns the preservation of cultural identity, which is considered as a valuable asset, but menaced by globalization. But what are the deter- minants of culture? Why is culture such a sensitive issue? Culture can be de² ned as: “Behaviour peculiar to Homo sapiens, together with material objects used as an integral part of this behaviour. Thus, culture includes language, ideas, beliefs, customs, codes, institutions, tools, techniques, works of art, rituals, and ceremonies, among other ele- ments (Britannica 2005).” Beside individual differences between people, culture is the main driv- ing force that separates humans into groups. Out of the many elements that de² ne culture only two are readily observable: language and religion.
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v17_2006l - On the Inuence of World Religions on...

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