Abstract
Bilateral flows of both people (via migration) and goods (via trade) between countries are imperative in the field of international economics and share many common characteristics. This thesis attempts to examine the relative significance of language proximity in terms of international migration and trade simultaneously, using the standard gravity model. For this purpose, we use a dataset on migration and trade flows from 223 host countries to 30 OECD destination countries in the period 1980-2006. We find that language plays an important role in shaping migration patterns and boosting trade volumes. In addition, the effect of gravity variables (i.e., GDP and geographical distance) on migration and trade are in line with economic theory with small variations. The estimation results successfully show that countries that are farther apart trade less and have less migration between them, while economically larger countries are more engaged in bilateral trade and attract more immigrants.