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

Chang Hoon Oh, W. Selmier and Donald Lien

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2011, vol. 40, issue 6, 732-735

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.

Keywords: Language; Gravity equation; International trade; Foreign direct investment; Transaction costs (search for similar items in EconPapers)
JEL-codes: F10 F20 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:40:y:2011:i:6:p:732-735

DOI: 10.1016/j.socec.2011.08.003

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