While the impact of culture on international trade and foreign direct investment (FDI) has been much discussed, the effect of language was undervalued in international business. We view this lack of literature by integrating international economics, international business, the business of Chinese history and linguistics to study the language of transaction costs. While we recognize that languages are a tool in international economic transactions and a vehicle for the transmission of cultural values, our results suggest that this tool works differently in international trade and FDI. Communication costs for both foreign direct investment and international trade shows the hierarchy, with English the most inexpensive of the major languages of trade, however, we found that the communication costs are much more important than FDI in international trade. In this case, we offer practical suggestions corporations may exercise with respect to this issue. "Hide
by Chang Hoon Oh, W. Travis III Selmier Source: Business Horizons 12 pages. Publication Date: March 15, 2012. Prod. #: BH471-PDF-ENG
Related Case Solutions & Analyses:
Enterprise ownership and control in China: Governance with a Chinese twist
New Tools to Capture the Elusive Green Consumer
Global Asset Allocation: Crude Calculations
Pan Boricua: Developing a Market Strategy for the Hispanic Market in the United States
Transkin Income Fund: Leading Entrepreneurial Teams
Hong Kong Economic Times Group: Diversification and Differentiation
Rates and Ratios Tell a Story
WIPHOLD (A): Beyond Labor and Consumption
William Levitt Levittown and the Creation of American Suburbia
Financial Crises and Firm Performance
