Cultural Convergence and Change in the European Union: the Role of Bilateral Trade

Abstract

This paper considers the role bilateral trade could have in changing and converging national cultures in the European Union. The Union facilitates trade between its members, which may change their cultures and bring them closer together. Understanding this process is important because cultural differences can exacerbate challenges such as the euro crisis. This paper looks at cultural values crucial to the Union; those relating to the role of the state, xenophobia, and entrepreneurship. By considering the relation of both absolute values and cultural distance between countries in relation to trade insight is given in the ways trade and culture are associated. Countries which trade more are found to become less open to outsiders. Values on the role of the state and entrepreneurship diverge between countries as the trade flows between them increase in size, although exceptions exist depending on the goods traded and features of the trading countries. This paper does not test causal connections, but it seeks to suggest theoretical explanations for the observed relation between trade and culture in the EU.