• Bilateral trade
• Language
• network effect
• Panel data
• Spain

This thesis studies the influence of language and ethnic networks on Spain’s international trade. More precisely, I test whether and to what extent speaking the same or a similar language affects trade and the role of immigrant and emigrant communities on Spain’s imports and exports.
For this purpose, I have built a panel dataset composed of 147 Spain’s partner countries surveyed for 22 years. Besides language and network variables, the dataset includes other institutional and cultural factors that influence international trade such as institutes of Spanish culture abroad, inward foreign students, religions and colonial status.
Findings, obtained through pooled ordinary least squares and fixed effect regressions, suggest that speaking the same native language has a trade-promoting impact, especially on bilateral exports. By contrast, linguistic distance does not diminish significantly international trade.
Results also support the idea that if immigrants and emigrants have a similar cultural, linguistic and institutional background with the host country, the presence of transnational networks does not increase significantly bilateral trade flows.

This thesis studies the influence of language and ethnic networks on Spain’s international trade. More precisely, I test whether and to what extent speaking the same or a similar language affects trade and the role of immigrant and emigrant communities on Spain’s imports and exports. For this purpose, I have built a panel dataset composed of 147 Spain’s partner countries surveyed for 22 years. Besides language and network variables, the dataset includes other institutional and cultural factors that influence international trade such as institutes of Spanish culture abroad, inward foreign students, religions and colonial status. Findings, obtained through pooled ordinary least squares and fixed effect regressions, suggest that speaking the same native language has a trade-promoting impact, especially on bilateral exports. By contrast, linguistic distance does not diminish significantly international trade. Results also support the idea that if immigrants and emigrants have a similar cultural, linguistic and institutional background with the host country, the presence of transnational networks does not increase significantly bilateral trade flows.