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New Paper on Link Between Language Teaching and Foreign Investment.

November 26, 2014

One of the issues that French embassies are supposed to keep on top of is the status of French in the local education system. Of course French opens the way to the French education system but there’s also the saying that if you speak French you buy French.

Given this belief there’s an interesting paper forthcoming in International Studies Quarterly that probes the link between language and Foreign Direct Investment. Previous research has found a relationship between official languages and investment but the new paper by Kim et al looks at data on which languages are actually taught in schools and finds a robust relationship between language teaching and inward investment.   That is if you want to attract investment make sure that your country teaches the language of the country that you want to attract investment from. They recognize that English is a special case but what’s especially striking is the consequences of starting to teach Chinese. A country gets that gets a Confucius Institute can expect a 900% rise in Chinese investment five years later.

I’m less convinced by some of the discussion of the causal mechanisms behind the quantitative relationship but here’s some evidence that diplomats can use to persuade host governments that language teaching has some benefit.

Kim, Moonhawk, Amy H. Liu, Kim-Lee Tuxhorn, David S. Brown, and David Leblang. ‘Lingua Mercatoria: Language and Foreign Direct Investment’. International Studies Quarterly, 1 October 2014, n/a – n/a. doi:10.1111/isqu.12158.

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