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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2014/6

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Trade Policy; International Trade Organizations ; National Government Expenditures and Education ; Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
• Subject: Internationalisation ; language skills ; SMEs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Foreman-Peck, James ; Zhou, Peng
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/109060
• Last update: 10.03.2025, 11:44 AM CET