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International business complexity and the internationalization of languages

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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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    5. Walid Hejazi & Jianmin Tang & Weimin Wang, 2021. "Selection, learning, and productivity at the firm level: Evidence from Canadian outward FDI," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(2), pages 306-320, March.
    6. Lien, Donald & Oh, Chang Hoon, 2014. "Determinants of the Confucius Institute establishment," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(3), pages 437-441.
    7. Nazir Muhammad Abdullahi & Xuexi Huo & Qiangqiang Zhang & Aminah Bolanle Azeez, 2021. "Determinants and Potential of Agri-Food Trade Using the Stochastic Frontier Gravity Model: Empirical Evidence From Nigeria," SAGE Open, , vol. 11(4), pages 21582440211, December.
    8. 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).
    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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