chapter  5
Expected relationships between cultural distance and facets of economic globalization
Pages 24

The expectation that cultural distance inhibits trade flows, foreign direct investment, and migration is based on the notion that, broadly defined and all else being equal, cultural differences correspond with higher transactions costs. As a result, greater cultural distance is thought to hinder cross-border interactions. This is, in a few words, the premise that we examine and for which results are presented in the following three chapters. Before proceeding to these results, in this chapter we bridge the material presented in Part 1 and the analyses presented in the remainder of Part 2. Accordingly, we provide additional details that are related to the anticipated relationships between cultural differences and our three facets of economic globalization.