Trade Openness and Culture

This paper empirically analyzes the effect of trade openness on culture, measured by indicators of trust, respect for others, perceived level of self-determination, and level of obedience. These cultural categories play a central role in encouraging or limiting economic and social interactions and therefore impact economic outcomes. We find that trade openness has a positive and highly significant impact on culture. The more open a country is to trade, the more likely it is to possess culture conducive to increased social and economic interactions. This result is robust to the inclusion of a variety of control variables, different model specifications, and alternative trade measures.