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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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    12. Lien, Donald & Oh, Chang Hoon & Selmier, W. Travis, 2012. "Confucius institute effects on China's trade and FDI: Isn't it delightful when folks afar study Hanyu?," International Review of Economics & Finance, Elsevier, vol. 21(1), pages 147-155.
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    Cited by:

    1. repec:spr:scient:v:105:y:2015:i:1:d:10.1007_s11192-015-1651-1 is not listed on IDEAS
    2. Antonio Di Paolo & Aysit Tansel, 2015. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Journal of Development Studies, Taylor & Francis Journals, vol. 51(4), pages 407-421, April.
    3. repec:eee:chieco:v:44:y:2017:i:c:p:241-252 is not listed on IDEAS
    4. Mariya Neycheva, 2016. "Secondary versus higher education for growth: the case of three countries with different human capital’s structure and quality," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(6), pages 2367-2393, November.
    5. repec:kap:empiri:v:44:y:2017:i:3:d:10.1007_s10663-017-9374-6 is not listed on IDEAS
    6. Mariya Neycheva, 2015. "Impact of Secondary and Tertiary Education on Economic Growth: a Co-integration Model for Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 82-106.
    7. 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.
    8. Chensheng Xu & Feng Yao & Fan Zhang, 2015. "An Investigation of Confucius Institute’s Effects on China’s OFDI via Cultural Difference and Institutional Quality," Working Papers 15-45, Department of Economics, West Virginia University.
    9. Santos, Maria & Brochado, Ana & Esperança, José, 2016. "Foreign direct investment patterns of global hotel chains," Journal of Business Research, Elsevier, vol. 69(11), pages 5235-5240.

    More about this item

    Keywords

    Language; Gravity equation; International trade; Foreign direct investment; Transaction costs;

    JEL classification:

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

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