Ways Of Communication And Inter-province Trade

This paper focuses on the impact of dialect similarities among the dialect cities on the inter-province trade based on the pooled cross-sectional data of 16 dialect cities in 1964 and 1995 and the cross-sectional data of mean trade from 2000 to 2013 between the corresponding provinces.By applying OLS and PPML estimation,we find that when the pattern of the inter-province trade belongs to the same dialect region but different dialect sub-region,dialect similarities have a significantly positive effect on the amount of inter-province trade,but when the inter-province trade involves with different dialect region,dialect similarities have a significantly negative effect on the amount of inter-province conversely.Since dialects own the property of cultural identity,thus we explain the findings by the following mechanism:one is the the cultural identification effect which means the more similar between dialect cities,the larger quantity of trade among the corresponding provinces because people prefer to trade with those who come from the similar cultural background.The other mechanism is complement effect which implies that with the premise that there is no communication problem between the dealers mostly,the big dissimilarities of dialects among the cities incurs trade because it is more possible the situation that the more different of the dialect cities’ culture,the more complimentary to each other in the products they produce.