This study aims to examine how language similarity influences international trade disputes within the World Trade Organization (WTO). Contrary to the assumption that language similarity fosters cooperation, this study posits that it can facilitate strategic maneuvering and adversarial engagement in formal disputes.
Using data on 5,651 country pairs and 565 WTO trade dispute cases from 1995 to 2019, this study introduces a novel measure of language similarity, dyadic language coupling (DLC), based on phylogenetic and lexical proximity and incorporates common spoken language (CSL) as an additional dimension. A panel probit model was used to estimate the effects of language similarity on dispute initiation and adjudication duration in the WTO.
Results indicate that greater language similarity significantly increases the likelihood of dispute initiation and prolongs adjudication. CSL raises the initiation probability by 0.76% and extends the duration by 0.38%, while DLC increases the initiation by 0.22% and the duration by 0.24%. A nonlinear effect suggests that beyond a threshold, a higher language similarity strengthens the intention to prevail, potentially lengthening the settlement time.
This study is limited to WTO trade disputes; future research could examine whether language similarity exerts similar effects in other international or bilateral negotiation contexts.
This study frames language similarity as a dyadic linguistic capacity that enhances countries’ communication and strategic performance in WTO disputes. Extending the capacity hypothesis, it demonstrates that linguistic capacity complements traditional capabilities in shaping the dynamics of disputes. The dyad-specific measure provides a precise tool for systematically assessing how communication alignment affects dispute behavior.
