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Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Südekum, Jens (2010): Dialects, cultural Identity, and economic exchange. CESifo Working Paper, 2961
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We investigate whether time-persistent cultural borders impede economic exchange across regions of the same country. To measure cultural differences we evaluate, for the first time in economics, linguistic micro-data about phonological and grammatical features of German dialects. These data are taken from a unique linguistic survey conducted between 1879 and 1888 in 45,000 schools. Matching this information to 439 current German regions, we construct a dialect similarity matrix. Using a gravity analysis, we show that current cross-regional migration is positively affected by historical dialect similarity. This suggests that cultural identities formed in the past still influence economic exchange today.

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