Firm-Level Evidence for the Language Investment Effect on SME Exporters

James Foreman-Peck and Peng Zhou

No E2014/6, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: Both analysis of international trade and the knowledge resource theory of the firm imply that language skills should play a vital role in exporting. This may be apparent to large multinationals with sites in many different linguistic locations, but we show it is less obvious to smaller companies. With data on the language used by each of a large sample of European small and medium sized enterprises in their export markets we test and estimate the effects of language assets on language performance in export markets and on export sales. Controlling for the possibility that language skills may be acquired by exporting, we find a very substantial export return to linguistic expertise, indicative of unexploited gains from investment in languages. There is also evidence of greater under-investment in language skills in English-speaking Europe, which we show can be a prediction of Konya s (2006) trade model.

Keywords: Internationalisation; language skills; SMEs (search for similar items in EconPapers)
JEL-codes: D22 F13 H52 R42 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-06
New Economics Papers: this item is included in nep-cse and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://carbsecon.com/wp/E2014_6.pdf (application/pdf)

Related works:
Journal Article: Firm-Level Evidence for the Language Investment Effect on SME Exporters (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2014/6

Access Statistics for this paper

More papers in Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section Contact information at EDIRC.
Bibliographic data for series maintained by Yongdeng Xu ().