Measuring, Modeling, and Assessing Culture in International Trade: A Systematic Literature Review

Abstract

This paper conducts a systematic literature review to examine how culture is measured, modeled, and assessed in international trade research. Drawing on 44 high-quality empirical studies identified through the PRISMA framework, it addresses three key research questions: (1) how cultural factors are incorporated into trade models, (2) how culture is quantified and analyzed using econometric techniques, and (3) whether the effects of culture on trade vary across contexts. The review distinguishes between proxy variables for culture, and direct culture measures. It also discusses innovations in measurement.  Findings suggest that in international trade research, the non-linearity and context-dependent of cultural effects reveal the dynamic regulation of cultural effects by different regions, industries, and institutional settings. This paper aims to provide valuable insights in quantification of culture, and suggestions of research model building in the future.