Estimating the Institutional and Network Effects of Religious Cultures on International Trade

Abstract

As a social institution, religion directly influences economic behavior, including trade. Religious culture also impacts trade indirectly because it is part of a society's overall culture, which in turn influences many other formal and informal institutions that also directly influence economic activity. Finally, religious cultures support trade networks. Applying panel data for 84 countries for the years 1995-2000 to an augmented gravity model that distinguishes between the direct institutional, indirect institutional, and network effects of religious cultures, we find that only three of the world's eight major religious cultures directly stimulate international trade. However, the majority of the religious cultures seem to indirectly increase trade through their influence on societies' other institutions, and six of the eight major religions have network effects that increase trade. Copyright 2007 Blackwell Publishing Ltd..

Network Analysis for International Relations

“…A consensus on the importance of networks exists in international relations+ Effective incorporation of network analysis into the field will require great care, however+ Currently, international relations research too often deploys network concepts and theories that are inappropriate or grounded in unproven assumptions+ Selective extension of existing theory and findings to international relations may also be misleading+ In translating network analysis to international relations, scholars have made theoretical leaps, equating homophily with positive ties and structural equivalence with affinity; yet either or both may lead to competition instead of cooperation+ Some of the new literature often assumes that networks result from shared characteristics, such as common democracy, ethnic groups, or religion+ 84 82+ Boissevain 1979, 393+ 83+ On the decline and revival of network analysis in anthropology, see Johansen 2004, 2-6+ 84+ See Maoz 2001;Maoz et al+ 2005;and Lewer and Van den Berg 2007+ While homophily is an important mechanism in creating ties, the mere existence of common characteristics does not always spur ties+ For people, as for most types of actors, sharing one particular trait or characteristic, such as height, race, or gender, does not automatically prompt a network tie or positive interaction+ Instead, arguments about homophily and ties must be carefully grounded in theories of interaction+ Similarly, structural equivalence has been used as a measure of common identity+ 85 Yet structural equivalence does not predict that nodes in similar positions act in positive ways toward each other+ Network similarity can lead to cooperation, but it can also lead to competition for resources+ In other instances, scholars have bent network analysis to conform to existing methodologies in international relations+ Networks have been reduced to static properties of individual nodes; a relational view that emphasizes dynamic analysis has been lost+ Network analysis challenges many standard statistical assumptions commonly used in international relations+ In particular, it threatens the assumption of independence required for standard dyadic statistical treatments in the international relations conflict literature~that is, network theory argues that observation of interaction between A and B is dependent on observations between A and C, B and C, and other network nodes!+ Fortunately, the tools of network analysis allow for estimation of unobserved~latent! network dependence-taking into account the likelihood of interaction given underlying network structures+ These methods are similar to those used to correct for spatial correlation, although they correct for network dependencies, rather than measuring them as quantities of interest+ 86 These tools have already been used to challenge traditional wisdom on the determinants of trade as well as parts of the Kantian tripod+ 87 The underlying causes of network ties beyond monadic attributes and dyadic relationships can also be modeled using stochastic agent-based models+ These models simultaneously measure the effects of agent characteristics, dyadic covariates, and particular network mechanisms on network formation over time+ 88 These models have been used to demonstrate that transitivity is a crucial factor in the formation of PTAs: recent agreements are more likely between two countries~by an order of magnitude!…”

Did the Devil Make Them Do It? The Effects of Religion in Public Goods and Trust Games

“… 1 Helbe (2007) and Lewer and Van den Berg (2007) explore the relationship between religion and international trade. …”

Talking trade: language barriers in intra-Canadian commerce

“…Although Lipset (1990) argues that religion has a smaller role in Canadian everyday life than in the US, religious commonality has been shown to affect international trade patterns (e.g. Lewer and van den Berg, 2007;Helble, 2007). Hence, I control for the probability that two randomly chosen people from two states have the same denomination.…”