Ethnic minorities and trade: The Soviet Union as a natural experiment

Abstract

This paper examines the role of ethnic minorities in bilateral trade between countries of the ex‐Soviet Union. We argue that both forced re‐settlement of entire ethnic groups during the Stalin era and artificially drawn borders in Central Asia led to an exogenous ethnic composition within countries. Using data collected by ethnologists on the share of ethnic groups across countries, we build an index of bilateral ethnic networks and estimate its effect on trade using a gravity model. While ethnic networks do not seem to have played a role in inter‐republic trade during the Soviet Union, we find a positive and significant effect of ethnic networks on trade in the years following the collapse of the Soviet Union. This effect, however, eroded steadily from the early 2000s.

Religion and Culture as Factors of Trust in Foreign Trade

“…Так, например, было выявлено, что культурное сходство имеет наибольшее значение при ведении торговли дифференцированными товарами, нежели гомогенными (Rauch, Trindade, 2002). Г. Гокмен с соавторами (Gokmen et al, 2018), изучая динамику влияния культурных различий на торговлю в различное время, доказали не только отрицательную связь между культурными различиями и двусторонним импортом стран, но и на основе анализа гравитационной модели выявили, что степень этого негативного влияния была значительно больше, например, в период после «холодной войны», нежели в период ведения торговли во время самой «холодной войны».…”

Vanishing Borders: Ethnicity and Trade Costs at the Origin of the Yugoslav Market

“…1 In a related body of work, scholars have looked at how the presence of ethnic minorities enable international trade with their home country by addressing problems of asymmetric information and contract enforcement in an environment with a weak protection of property rights (Gokmen et al, 2018;Parsons and Vézina, 2018;Rauch and Trindade, 2002).…”

“…Our article contributes to the literature on ethnicity and international trade by casting a new light on the causes of changes in the commercial role of ethnic ties. Several works have noticed how the role of ethnic ties in trade can change across space and time (Gokmen, 2017;Gokmen et al, 2018;Jha, 2013;Richman, 2017;Schulze and Wolf, 2009).…”

Vanishing borders: ethnicity and trade costs at the origin of the Yugoslav market

“…Our article contributes to the literature on ethnicity and international trade by casting a new light on the causes of changes in the commercial role of ethnic ties. Several works have noticed how the role of ethnic ties in trade can change across space and time (Gokmen, 2017;Gokmen et al, 2018;Jha, 2013;Richman, 2017;Schulze and Wolf, 2009). To explain this pattern, most scholars (Carrère and Masood, 2018;Head et al, 2010;Jha, 2013;Richman, 2017) stress that the utility of ethnic ties depends on context.…”

“…In a related body of work, scholars have looked at how the presence of ethnic minorities enable international trade with their home country by addressing problems of asymmetric information and contract enforcement in an environment with a weak protection of property rights(Gokmen et al, 2018;Parsons and Vézina, 2018;Rauch and Trindade, 2002).…”