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  • March 2021
  • Article
  • Journal of International Economics

International Trade and Social Connectedness

By: Michael Bailey, Abhinav Gupta, Sebastian Hillenbrand, Theresa Kuchler, Robert J. Richmond and Johannes Stroebel
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Abstract

We use de-identified data from Facebook to construct a new and publicly available measure of the pairwise social connectedness between 170 countries and 332 European regions. We find that two countries trade more when they are more socially connected, especially for goods where information frictions may be large. The social connections that predict trade in specific products are those between the regions where the product is produced in the exporting country and the regions where it is used in the importing country. Once we control for social connectedness, the estimated effects of geographic distance and country borders on trade decline substantially.

Keywords

Social Connections; International Trade; Trade; Social Media

Citation

Bailey, Michael, Abhinav Gupta, Sebastian Hillenbrand, Theresa Kuchler, Robert J. Richmond, and Johannes Stroebel. "International Trade and Social Connectedness." Journal of International Economics 129 (March 2021).
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About The Author

Sebastian Hillenbrand

Finance
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