Is language an economic institution? Evidence from R&D investment

Jianxin Daniel Chi, Xunhua Su, Yun Tang () and Bin Xu

Journal of Corporate Finance, 2020, vol. 62, issue C

Abstract: Some languages encode future timing more ambiguously than others. We identify two economic channels through which more ambiguous reference to future timing leads to higher levels of R&D investment. Our empirical tests on country- and firm-level R&D investment confirm this prediction, even after controlling for an extensive set of formal and informal economic institutions and addressing endogeneity concern in multiple ways. Tests on patent generation provide further evidence that ambiguous reference to future timing leads to more innovation.

Keywords: Language; R&D; Innovation; Economic institution; Future-time reference (search for similar items in EconPapers)
JEL-codes: D02 G30 O30 O32 Z13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:62:y:2020:i:c:s0929119920300225

DOI: 10.1016/j.jcorpfin.2020.101578

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