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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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    References listed on IDEAS

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    Cited by:

    1. Tenzer, Helene & Terjesen, Siri & Harzing, Anne-wil, 2017. "Language in international business : A review and agenda for future research," Other publications TiSEM 8afd108a-9666-4fbb-934f-6, Tilburg University, School of Economics and Management.
    2. 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.
    3. repec:spr:manint:v:57:y:2017:i:6:d:10.1007_s11575-017-0319-x is not listed on IDEAS
    4. 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.

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