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Lingua Mercatoria: Language and Foreign Direct Investment
Journal article   Open access   Peer reviewed

Lingua Mercatoria: Language and Foreign Direct Investment

Moonhawk Kim, Amy H. Liu, Kim-Lee Tuxhorn, David S. Brown and David Leblang
International studies quarterly, v 59(2), pp 330-343
01 Jun 2015
url
https://doi.org/10.1111/isqu.12158View
Published, Version of Record (VoR) Open

Abstract

Government & Law International Relations Political Science Social Sciences
Does language choice attract foreign direct investment (FDI), and if so, how? We argue that languagea dynamic instrument for reducing transaction costscan influence investors' decision to allocate capital. Potential host countries attract investments by coordinating their domestic language policiesespecially those in educationto match the language of the potential FDI investor. We subject our argument to three different tests: (i) a cross-sectional sample of all global Organization for Economic Co-operation and Development investments that employs a newly constructed language-in-education measurement; (ii) a newly assembled time-series cross-sectional data set of all Chinese FDI abroad; and (iii) a detailed case study that uses process tracing to explain Chinese FDI in Indonesia. The results from these tests demonstrate a significant and robust relationship between language and FDI.

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32 citations in Scopus

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#17 Partnerships for the Goals
#9 Industry, Innovation and Infrastructure

Source: SDGs in the Output

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Collaboration types
Domestic collaboration
Web of Science research areas
International Relations
Political Science
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