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The role of language connectedness in reducing home bias in trade, investment, information, and people flows
journal contribution
posted on 2023-06-09, 20:20 authored by Palitha KonaraThis study introduces the concept of a country’s language connectedness (LC), namely, the extent to which the country is connected to the rest of the world in terms of the number of potential communicative partners. LC depends on the extent to which the country’s languages are spoken outside that country. Operationalizing and constructing an index capturing LC, I empirically show that a country’s LC is strongly associated with its globalization level. This effect is particularly strong in cross-border trade and investment and information flows. I also find that countries with languages belonging to large linguistic families (i.e., countries with greater linguistic connectedness) are more globalized. This study presents language barriers as a key contributor to home bias, that is, the tendency toward more within-border than cross-border interactions.
History
Publication status
- Published
File Version
- Accepted version
Journal
Research in International Business and FinanceISSN
0275-5319Publisher
ElsevierExternal DOI
Article number
a101180Department affiliated with
- Strategy and Marketing Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2020-01-21First Open Access (FOA) Date
2021-07-07First Compliant Deposit (FCD) Date
2020-01-20Usage metrics
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