Essays on cultural trade

Abstract

Over the past three decades, international cultural trade has surged, yet empirical evidence on the impacts of trade policies remains sparse. This study examines the determinants of cultural trade, focusing on Free Trade Agreements (FTAs) and culture-specific provisions like Intellectual Property Rights (IPRs), audio-visual co-production agreements, and cultural cooperation. Findings indicate that signing an FTA correlates with a 28% increase in cultural trade among participating countries, with the presence of an IPR chapter playing a crucial role. The research also investigates the effects of trade sanctions— including trade, financial, and arms sanctions—on both cultural and non-cultural trade. Results show that trade sanctions decrease cultural and non-cultural trade by 23% and 17%, respectively, with varying impacts based on their direction and coverage. Regarding other types of sanctions, the study demonstrates that the imposition of military assistance and arms sanctions leads to a significant reduction only in cultural trade. However, a more nuanced analysis, considering the heterogeneity of sanctions based on their origin, reveals that the United States (US)- and the European Union (EU)-imposed military assistance and arms sanctions have significantly negative impacts on their bilateral non-cultural trade. Because these sanctions are not cultureor economic-related, their impact on both cultural and non-cultural trade can be considered "collateral damage" in terms of economic welfare and political effectiveness. Furthermore, the study explores whether cultural trade reflects the impacts of globalisation, particularly concerning physical distance. Unlike other sectors, cultural trade does not adhere to the "distance-elasticity puzzle," where distance's negative impact on trade remains consistent or intensifies over time. This research challenges existing views by demonstrating that cultural trade is less susceptible to the distance-elasticity puzzle observed in other sectors. Therefore, as a counterargument to Coe et al. (2002), I conclude that the distance-elasticity puzzle is everywhere but not in cultural trade.