The role of language in international trade and the "made in Italy"

We investigate the relationship between language and trade, and we acknowledge language as both a code of communication and an important component of culture. We refer to the case of Italy where a large portion of export is related to the image of the "Made in Italy" (e.g., food of the Italian tradition, luxury cars, fashion clothes, etc.). In this context language is a means of conveying suggestions and symbols that become part of the goods themselves. Specifically, we study whether the presence of Italian as a migration language (proxied by the presence of migrants of Italian origin), Italian as a cultural language (proxied by the presence of students of Italian language), and proximity to the Italian language are associated with Italian exports. We implement a Poisson regression by pseudo-maximum likelihood on a database that includes 190 countries where Italy exports. Results show a positive association between Italian exports, including those of a conventionally defined core set of made in Italy sectors, with the presence of migrants of Italian origin and students in Italian cultural institutes. These findings are mainly driven by export towards high-income countries. The implications of these results for industrial policy are discussed.