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International trade, foreign direct investment, and transaction costs in languages

Author

Listed:
  • Oh, Chang Hoon
  • Travis Selmier, W.
  • Lien, Donald

Abstract

We examine the roles of major trade languages in international trade and foreign direct investment (FDI) flows. Empirical results confirm that speaking a common language increases trade and FDI flows, yet the effect of major languages is more substantial in FDI than in international trade. In addition, we find evidence of a hierarchy in transaction costs of major languages in both trade and FDI.

Suggested Citation

  • Oh, Chang Hoon & Travis Selmier, W. & Lien, Donald, 2011. "International trade, foreign direct investment, and transaction costs in languages," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 732-735.
    • Handle: RePEc:eee:soceco:v:40:y:2011:i:6:p:732-735
    DOI: 10.1016/j.socec.2011.08.003
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    References listed on IDEAS

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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