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International business complexity and the internationalization of languages

Author

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  • Selmier, W. Travis
  • Oh, Chang Hoon
Abstract
While the impacts of culture on international trade and foreign direct investment (FDI) have been much discussed, the influence of languages has been underappreciated in international business. We address this paucity by integrating literature from international economics, international business, Chinese business history, and linguistics to examine the transaction costs of languages. While we recognize that languages represent both a tool in international economic transactions and a vehicle to transmit cultural values, our results point out that this tool is employed differently in international trade and in FDI. Communication costs for both FDI and international trade show a hierarchy, with English the most inexpensive among major trade languages; however, we find that communication costs are much more important in FDI than in international trade. Herein, we offer practical suggestions corporations may implement regarding the matter.

Suggested Citation

  • Selmier, W. Travis & Oh, Chang Hoon, 2012. "International business complexity and the internationalization of languages," Business Horizons, Elsevier, vol. 55(2), pages 189-200.
    • Handle: RePEc:eee:bushor:v:55:y:2012:i:2:p:189-200
    DOI: 10.1016/j.bushor.2011.11.006
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    References listed on IDEAS

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    2. Navío-Marco, Julio & Solórzano-García, Marta & Matilla-García, Mariano & Urueña, Alberto, 2016. "Language as a key factor of long-term value creation in mergers and acquisitions in the telecommunications sector," Telecommunications Policy, Elsevier, vol. 40(10), pages 1052-1063.
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    7. Filippov, Sergey, 2012. "European investment promotion agencies vis-à-vis multinational companies from emerging economies: Comparative analysis of BRIC investor targeting," MERIT Working Papers 2012-076, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Ly, Amadú & Esperança, José & Davcik, Nebojsa S., 2018. "What drives foreign direct investment: The role of language, geographical distance, information flows and technological similarity," Journal of Business Research, Elsevier, vol. 88(C), pages 111-122.
    9. Hurmerinta, Leila & Nummela, Niina & Paavilainen-Mäntymäki, Eriikka, 2015. "Opening and closing doors: The role of language in international opportunity recognition and exploitation," International Business Review, Elsevier, vol. 24(6), pages 1082-1094.
    10. del Campo, Cristina & Urquía-Grande, Elena & Pascual-Ezama, David, 2023. "Internationalizing the business school: A comparative analysis of English-medium and Spanish-medium instruction impact on student performance," Evaluation and Program Planning, Elsevier, vol. 98(C).

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