Culture and network may be interacted according to their impact on international trade, in such a way that networks alleviate the negative effect of cultural dissimilarity.This study investigates the effect of network and culture on international trade, and a possible interaction between two effects.Empirical findings from the augmented Underwear Care Bag gravity model using a bilateral data set of 34 OECD countries confirm the positive effect of cultural proximity and network on trade.
More importantly, the findings also reveal WOMENS WETSUITS an interaction effect in a way that networks, such as FDI, migration and internet, play a significant role in mitigating the deterrent effect of culture dissimilarity on international trade.The internet is found to have the strongest interaction effect, followed by FDI and migration.