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On the Influence of World Religions on International Trade
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11
ON THE INFLUENCE OF
WORLD RELIGIONS ON
INTERNATIONAL TRADE
Matthias Helble
As the world economy is integrating, trade between countries is growing rapidly. The exchange of goods not only has an economic, but also a cultural dimension. This paper investigates the possible ways that religion influences international trade patterns. It studies the view of the five world religions, namely
Hinduism, Judaism, Buddhism, Christianity, and Islam, on economic activity, and trade in particular. Analyzing empirically trade flows between 151 countries, the paper finds an impact of religion on trade. Furthermore, the results indicate that religious openness boosts trade performance of countries. Given these results, the paper derives several policy recommendations.1
INTRODUCTION
The individual person is at the origin of all economic activity. The individual’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 (helble2@hei.unige.ch).
7
210
Matthias Helble
countries the more inter-cultural interaction between trading partners is necessary. Some authors argue that globalization brings down cultural differences (Barber
209
11
ON THE INFLUENCE OF
WORLD RELIGIONS ON
INTERNATIONAL TRADE
Matthias Helble
As the world economy is integrating, trade between countries is growing rapidly. The exchange of goods not only has an economic, but also a cultural dimension. This paper investigates the possible ways that religion influences international trade patterns. It studies the view of the five world religions, namely
Hinduism, Judaism, Buddhism, Christianity, and Islam, on economic activity, and trade in particular. Analyzing empirically trade flows between 151 countries, the paper finds an impact of religion on trade. Furthermore, the results indicate that religious openness boosts trade performance of countries. Given these results, the paper derives several policy recommendations.1
INTRODUCTION
The individual person is at the origin of all economic activity. The individual’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 (helble2@hei.unige.ch).
7
210
Matthias Helble
countries the more inter-cultural interaction between trading partners is necessary. Some authors argue that globalization brings down cultural differences (Barber
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