Effects of Islamic religiosity on bilateral trust in trade: The case of Turkish exports

Daniela Maggioni, Alessia Lo Turco

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

Using a rich firm level data set for Turkish manufacturing, we test whether sharing similar religious beliefs with potential contracting parties drives a firm's first time entry into export markets. We exploit variation in the practice of Islam across Turkish NUTS3 regions and we find that firms located in regions characterised by stronger religiousness are more likely to enter export destinations with a higher share of Muslims among their population. This result is robust to the control for past trade, common language, cultural and migration ties as well as for selective trade policy in favour of politically connected religious business groups. In particular, religious proximity eases export entry for producers of “trust intensive” goods, it favours subsequent foreign market entries and reduces the export exit probability. All in all, our evidence supports an export enhancing effect of religious proximity working through export sunk costs reduction rather than through similarity in preferences.
Original languageEnglish
Pages (from-to)947-965
Number of pages19
JournalJournal of Comparative Economics
Volume46
DOIs
Publication statusPublished - 2018

Keywords

  • Export entry
  • Islam
  • Religious proximity
  • Uncertainty

Fingerprint

Dive into the research topics of 'Effects of Islamic religiosity on bilateral trust in trade: The case of Turkish exports'. Together they form a unique fingerprint.

Cite this