Is Language an Economic Institution? Evidence From R&D Investment
Document Type
Article
Publication Date
1-21-2020
Publication Title
Journal of Corporate Finance
Volume
62
First page number:
1
Last page number:
27
Abstract
Some languages encode future timing more ambiguously than others. We identify two economic channels through which more ambiguous reference to future timing leads to higher levels of R&D investment. Our empirical tests on country- and firm-level R&D investment confirm this prediction, even after controlling for an extensive set of formal and informal economic institutions and addressing endogeneity concern in multiple ways. Tests on patent generation provide further evidence that ambiguous reference to future timing leads to more innovation.
Keywords
Language; R&D; Innovation; Economic institution; Future-time reference
Disciplines
Business | Corporate Finance
Language
English
Repository Citation
Chi, J. D.,
Su, X.,
Ting, Y.,
Xu, B.
(2020).
Is Language an Economic Institution? Evidence From R&D Investment.
Journal of Corporate Finance, 62
1-27.
http://dx.doi.org/10.1016/j.jcorpfin.2020.101578