Skip to main content
Log in

Cross-Border Communication and Private Participation Projects: The Role of Genealogical Language Distance

  • Research Article
  • Published:
Management International Review Aims and scope Submit manuscript

Abstract

This paper investigates the impact of genealogical language distance in cross-border communication on private participation infrastructure projects. Our analysis of 5440 projects in 64 countries (1990–2004) shows that the probability of success of private participation projects is lower in countries characterized by a larger genealogical language distance. We also find that this effect is weaker when the project involves a local investor or the host country government. In contrast, the same effect is strengthened when the project is greenfield. Finally, including the host country government as an investor in the project has no moderating effect in the effect of genealogical language distance on private participation projects.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. Data is available at the following link: https://sites.google.com/site/ddowresearch/home/scales/languages.

  2. We are grateful to an anonymous reviewer for this suggestion.

References

  • Ai, C., & Norton, E. C. (2003). Interaction terms in logit and probit models. Economics Letters,80(1), 123–129.

    Article  Google Scholar 

  • Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park: Sage Publications.

    Google Scholar 

  • Barner-Rasmussen, W., & Aarnio, C. (2011). Shifting the faultlines of language: A quantitative functional-level exploration of language use in MNC subsidiaries. Journal of World Business,46, 288–295.

    Article  Google Scholar 

  • Barner-Rasmussen, W., & Björkman, I. (2007). Language fluency, socialization and inter-unit relationships in Chinese and Finnish subsidiaries. Management and Organization Review,3(1), 105–128.

    Article  Google Scholar 

  • Barner-Rasmussen, W., Ehrnrooth, M., Koveshnikov, A., & Mäkelä, K. (2014). Cultural and language skills as resources for boundary spanning within the MNC. Journal of International Business Studies,45(7), 886–905.

    Article  Google Scholar 

  • Boellis, A., Mariotti, S., Minichilli, A., & Piscitello, L. (2016). Family involvement and firms’ establishment mode choice in foreign markets. Journal of International Business Studies,47(8), 929–950.

    Article  Google Scholar 

  • Brannen, M. Y., & Doz, Y. L. (2010). From a distance and detached to up close and personal: Bridging strategic and cross-cultural perspectives in international management research and practice. Scandinavian Journal of Management,26(3), 236–247.

    Article  Google Scholar 

  • Brealey, R. A., Cooper, I. A., & Habib, M. A. (1996). Using project finance to fund infrastructure investments. Journal of Applied Corporate Finance,9(3), 25–39.

    Article  Google Scholar 

  • Conner, K., & Prahalad, C. K. (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organization Science,7(5), 477–492.

    Article  Google Scholar 

  • Contractor, F., Foss, N. J., Kundu, S., & Lahiri, S. (2018). Viewing global strategy through a microfoundations lens. Global Strategy Journal,9(1), 3–18.

    Article  Google Scholar 

  • Crystal, D. (2003). English as a global language. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Cuypers, R. P. I., Ertug, G., & Hennart, J. F. (2015). The effects of linguistic distance and lingua franca proficiency on stake taken by acquirers in cross-border acquisitions. Journal of International Business Studies,46(4), 429–442.

    Article  Google Scholar 

  • Delmon, J. (2009). Private sector investment in infrastructure: Project finance, PPP projects and risks. Chicago: Kluwer Law International.

    Google Scholar 

  • Dikova, D., & van Witteloostuijin, A. (2004). Foreign direct investment mode choice: Entry and establishment modes in transition economies. Journal of International Business Studies,38(6), 1013–1033.

    Article  Google Scholar 

  • Djankov, S. (1999). Ownership structure and enterprise restructuring in six newly independent states. Comparative Economic Studies,41, 75–95.

    Article  Google Scholar 

  • Doh, J. P. (2000). Entrepreneurial privatization strategies. Academy of Management Review,25(3), 551–571.

    Article  Google Scholar 

  • Doh, J. P., & Ramamurti, R. (2003). Reassessing risk in developing country infrastructure. Long Range Planning,36(4), 337–353.

    Article  Google Scholar 

  • Doh, J. P., Teegen, H., & Mudambi, R. (2004). Balancing private and state ownership in emerging markets’ telecommunications infrastructure: Country, industry, and firm influences. Journal of International Business Studies,35(3), 232–250.

    Article  Google Scholar 

  • Dow, D., Cuypers, I. R. P., & Ertug, G. (2016). The effects of within-country linguistic and religious diversity on foreign acquisitions. Journal of International Business Studies,47(3), 319–346.

    Article  Google Scholar 

  • Dow, D., & Karunaratna, A. (2006). Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies,37(5), 575–577.

    Article  Google Scholar 

  • Evans, J., & Mavondo, F. T. (2002). Psychic distance and organizational performance: An empirical examination of international retailing operations. Journal of International Business Studies,33(3), 515–532.

    Article  Google Scholar 

  • Fagre, N., & Wells, L. (1982). Bargaining power of multinationals and host governments. Journal of International Business Studies,13(2), 9–23.

    Article  Google Scholar 

  • Felin, T., Foss, N., Heimeriks, K., & Madsen, T. (2012). Microfoundations of routines and capabilities: Individuals, processes, and structure. Journal of Management Studies,49(8), 1351–1374.

    Article  Google Scholar 

  • Gao, C., Zuzul, T., Jones, G., & Khanna, T. (2017). Overcoming institutional voids: A reputation-based view of long-run survival. Strategic Management Journal,38(11), 2147–2167.

    Article  Google Scholar 

  • Gatti, S. (2013). Project finance in theory and practice: Designing, structuring, and financing private and public projects (2nd ed.). Waltham: Academic Press.

    Google Scholar 

  • Gilmartin, M., Wood, K. P., & O’Callaghan, C. (2018). Borders, mobility and belonging in the era of Brexit and Trump. Bristol and Chicago: Policy Press.

    Book  Google Scholar 

  • Gooskens, C. (2010). The contribution of linguistic factors to the intelligibility of closely related languages. Journal of Multilingual and Multicultural Development,28(6), 445–467.

    Article  Google Scholar 

  • Grimes, J. E., & Grimes, B. F. (Eds.). (1996). Ethnologue language family index. Dalas: Summer Institute of Linguistics.

    Google Scholar 

  • Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data analyses. Upper Saddle River: Prentice Hall.

    Google Scholar 

  • Hammarström, H. (2015). Ethnologue 16/17/18th editions: A comprehensive review. Language,91(3), 723–737.

    Article  Google Scholar 

  • Harzing, A. W., Koster, K., & Magner, U. (2011). Babel in business: The language barrier and its solutions in the HQ-subsidiary relationship. Journal of World Business,46(3), 279–287.

    Article  Google Scholar 

  • Henisz, W. J. (2002). The institutional environment for infrastructure investment. Industrial and Corporate Change,11(2), 355–389.

    Article  Google Scholar 

  • Henisz, W. J., Zelner, B. A., & Guillen, M. (2005). The worldwide diffusion of market-oriented infrastructure reform, 1977–1999. American Sociological Review,70(6), 871–897.

    Article  Google Scholar 

  • Hennart, J. F., & Park, Y. R. (1993). Greenfield vs acquisition. Management Science,39(9), 1054–1070.

    Article  Google Scholar 

  • Hodge, G. A., & Greve, C. (2007). Public–private partnerships: An international performance review. Public Administration Review,67(3), 545–558.

    Article  Google Scholar 

  • Holmqvist, J. (2009). Language influence in services: perceived importance of native language use in service encounters. Helsinki: Hanken School of Economics.

    Google Scholar 

  • Holmqvist, J. (2011). Consumer language preferences in service encounters: A cross-cultural perspective. Managing Service Quality,21(2), 178–191.

    Article  Google Scholar 

  • Holmqvist, J., & Grönroos, C. (2012). How does language matter for services? Challenges and propositions for service research. Journal of Service Research,15(4), 430–442.

    Article  Google Scholar 

  • Holmqvist, J., Van Vaerenbergh, Y., & Grönroos, C. (2014). Consumer willingness to communicate in a second language: communication in service settings. Management Decision,52(5), 950–966.

    Article  Google Scholar 

  • Inoue, C., Lazzarini, S., & Musacchio, A. (2013). Leviathan as a minority shareholder: Firm-level implications of state equity purchases. Academy of Management Journal,56(6), 1775–1801.

    Article  Google Scholar 

  • Itani, S., Järlström, M., & Piekkari, R. (2015). The meaning of language skills for career mobility in the new career landscape. Journal of World Business,50(2), 368–378.

    Article  Google Scholar 

  • Jiang, Y., Peng, M. W., Yang, X., & Mutlu, C. (2015). Privatization, governance, and survival: MNE investments in private participation projects in emerging economies. Journal of World Business,50(2), 294–301.

    Article  Google Scholar 

  • Jiménez, A., Russo, M., Kraak, J. M., & Jiang, G. F. (2017). Corruption and private participation projects in Central and Eastern Europe. Management International Review,57(5), 775–792.

    Article  Google Scholar 

  • Kafourus, M., & Aliyev, M. (2016). Institutional development and firm profitability in transition economies. Journal of World Business,51(3), 369–378.

    Article  Google Scholar 

  • Kania, M. (1992). The process of privatization and structural changes in the Polish economy, July–September 1990. Scandinavian Journal of Management,8(3), 175–179.

    Article  Google Scholar 

  • Karhunen, P., Kankaanranta, A., Louhiala-Salminen, L., & Piekkari, R. (2018). Let’s talk about language: A review of language-sensitive research in international management. Journal of Management Studies,55(6), 980–1013.

    Article  Google Scholar 

  • Kedia, B. L., & Reddy, R. K. (2016). Language and cross-border acquisitions: An exploratory study. International Business Review,25(6), 1321–1332.

    Article  Google Scholar 

  • Kennedy, P. A. (1992). Guide to econometrics. Cambridge: MIT Press.

    Google Scholar 

  • Khanna, T., & Palepu, K. G. (1997). Why focused strategies may be wrong for emerging markets. Harvard Business Review,75(4), 41–51.

    Google Scholar 

  • Khanna, T., & Rivkin, J. (2001). Estimating the performance effects of business groups in emerging markets. Strategic Management Journal,22(1), 45–74.

    Article  Google Scholar 

  • Klijn, E. H., Edelenbos, J., Kort, M., & van Twist, M. (2008). Facing management choices: An analysis of managerial choices in 18 complex environmental public–private partnership projects. International Review of Administrative Sciences,74(2), 251–282.

    Article  Google Scholar 

  • Kuznetsov, A., & Kuznetsova, O. (2014). Building professional discourse in emerging markets: Language, context and the challenge of sensemaking. Journal of International Business Studies,45(5), 583–599.

    Article  Google Scholar 

  • Lauring, J., & Klitmøller, A. (2015). Corporate language-based communication avoidance in MNCs: A multi-sited ethnography approach. Journal of World Business,50(1), 46–55.

    Article  Google Scholar 

  • Lester, T. (1994). Pulling down the language barrier. International Management,49(6), 42–44.

    Google Scholar 

  • Li, D., & Ferreira, M. P. (2008). Partner selection for international strategic alliances in emerging economies. Scandinavian Journal of Management,24(4), 308–319.

    Article  Google Scholar 

  • Li, Y., Peng, M. W., & Macaulay, C. D. (2013). Market-political ambidexterity during institutional transitions. Strategic Organization,11(2), 205–213.

    Article  Google Scholar 

  • Liu, L. A., Adair, W. L., & Bello, D. C. (2015). Fit, misfit, and beyond fit: Relational metaphors and semantic fit in international joint ventures. Journal of International Business Studies,46(7), 830–849.

    Article  Google Scholar 

  • Madhok, A. (1997). Cost, value and foreign market entry mode: The transaction and the firm. Strategic Management Journal,1(1), 39–61.

    Article  Google Scholar 

  • Major, I. (2003). Privatization in Hungary and its aftermath. In D. Parker, & D. Saal (Eds.), International handbook on privatization. Cheltenham: Edward Elgar.

    Google Scholar 

  • Marschan, R., Welch, D., & Welch, L. (1997). Language: The forgotten factor in multinational management. European Management Journal,15(5), 591–598.

    Article  Google Scholar 

  • Marschan-Piekkari, R., Welch, D., & Welch, L. (1999). In the shadow: The impact of language on structure, power and communication in the multinational. International Business Review,8(4), 421–440.

    Article  Google Scholar 

  • Marschan-Piekkari, R., & Zander, L. (Eds.). (2005). Language and communication in international management. New York: ME Sharpe.

    Google Scholar 

  • Mudambi, R. (2018). Knowledge-intensive intangibles, spatial transaction costs, and the rise of populism. Journal of International Business Policy,1(1–2), 44–52.

    Article  Google Scholar 

  • Neeley, T. (2017). The language of global success: How a common tongue transforms multinational organizations. Princeton: Princeton University Press.

    Book  Google Scholar 

  • Neeley, T., & Kaplan, R. S. (2014). What’s your language strategy? It should bind your company’s global talent management and vision. Harvard Business Review,92(9), 70–76.

    Google Scholar 

  • Neter, J., Wasserman, W., & Kutner, M. H. (1985). Applied linear statistical models: Regression, analysis of variance and experimental designs (2nd ed.). Irwin: Homewood.

    Google Scholar 

  • Nevitt, P. K., & Fabozzi, F. J. (2000). Project financing (7th ed.). London: Euromoney Books.

    Google Scholar 

  • Newman, S. (2000). Nationalism in postindustrial societies: Why states still matter. Comparative Politics,33(1), 21–41.

    Article  Google Scholar 

  • O’Grady, S., & Lane, H. W. (1996). The psychic distance paradox. Journal of International Business Studies,27(2), 309–333.

    Article  Google Scholar 

  • Peltokorpi, V. (2010). Intercultural communication in foreign subsidiaries: The influence of expatriates’ language and cultural competencies. Scandinavian Journal of Management,26(2), 176–188.

    Article  Google Scholar 

  • Peltokorpi, V., & Vaara, E. (2012). Language policies and practices in wholly owned foreign subsidiaries: A recontextualization perspective. Journal of International Business Studies,43(9), 808–833.

    Article  Google Scholar 

  • Peters, P. (2004). The Cambridge guide to english usage. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Piekkari, R., Oxelheim, L., & Randøy, T. (2015). The silent board: How language diversity may influence the work processes of corporate boards. Corporate Governance: An International Review,23(1), 25–41.

    Article  Google Scholar 

  • Piekkari, R., & Welch, C. (2010). The human dimension in multinational management: A way forward. Scandinavian Journal of Management,26(3), 467–476.

    Article  Google Scholar 

  • Piekkari, R., Welch, D. E., & Welch, L. S. (2014). Language in International business: The multilingual reality of global business expansion. Cheltenham: Edward Elger.

    Google Scholar 

  • Ramamurti, R. (2003). Can governments make credible promises? Journal of International Management,9(3), 253–269.

    Article  Google Scholar 

  • Ramamurti, R., & Doh, J. P. (2004). Rethinking foreign infrastructure investment in developing countries. Journal of World Business,39(2), 151–167.

    Article  Google Scholar 

  • Schleicher, A. (1853). Die ersten Spaltungen des indogermanischen Urvolkes. Allgemeine Monatsschrift für Sprachwissenschaft und Literatur (August), 786–787.

  • Shi, W., Hoskisson, R. E., & Zhang, Y. A. (2016). A geopolitical perspective into the opposition to globalizing state-owned enterprises in target states. Global Strategy Journal,6(1), 13–30.

    Article  Google Scholar 

  • Slangen, A. L. (2011). A communication-based theory of the choice between greenfield and acquisition entry. Journal of Management Studies,48(8), 1699–1726.

    Article  Google Scholar 

  • Stiglitz, J. E. (2018). Globalization and its discontents revisited: Anti-globalization in the era of Trump. New York: W.W. Norton & Company.

    Google Scholar 

  • Tietze, S. (2007). Language and international management: Emergent themes and new perspectives. In Proceedings of the 2007 critical management studies conference.

  • Tushman, M. L. (1978). Technical communication in R&D laboratories: The impact of project work characteristics. Academy of Management Journal,21(4), 624–644.

    Google Scholar 

  • Vaara, E., Tienari, J., Piekkari, R., & Säntti, R. (2005). Language and the circuits of power in a merging multinational corporation. Journal of Management Studies,42(3), 595–623.

    Article  Google Scholar 

  • Van den Born, F., & Peltokorpi, V. (2010). Language policies and communication in multinational companies: Alignment with strategic orientation and human resource management practices. Journal of Business Communication,47(2), 97–118.

    Article  Google Scholar 

  • Van Vaerenbergh, Y., & Holmqvist, J. (2014). Examining the relationship between language divergence and word-of-mouth intentions. Journal of Business Research,67(8), 1601–1608.

    Article  Google Scholar 

  • Welch, D. E., & Welch, L. S. (2008). The importance of language in international knowledge transfer. Management International Review,48(3), 339–360.

    Article  Google Scholar 

  • Wells, L. T., & Gleason, E. S. (1995). Is foreign infrastructure investment still risky? Long Range Planning,6(28), 130.

    Google Scholar 

  • Wieserma, M. F., & Bowen, H. P. (2009). The use of limited dependent variable techniques in strategy research: Issues and methods. Strategic Management Journal,30(6), 679–692.

    Article  Google Scholar 

  • Williamson, O. E. (1979). Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics,22(2), 233–261.

    Article  Google Scholar 

  • Williamson, O. E. (1981). The economics of organization: The transaction cost approach. The American Journal of Sociology,87(2), 233.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Alfredo Jimenez.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Jimenez, A., Holmqvist, J. & Jimenez, D. Cross-Border Communication and Private Participation Projects: The Role of Genealogical Language Distance. Manag Int Rev 59, 1009–1033 (2019). https://doi.org/10.1007/s11575-019-00400-y

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11575-019-00400-y

Keywords

Navigation