This paper employs gravity models to analyze the influence of Confucius Institutes (CI) on outward trade and FDI flows from China. We find significant increases in both Chinese exports and outward FDI flows to developing countries through establishment and operation of CIs, but little impact on...

<title>ABSTRACT</title> While the effects of cultural disparity and common institutional foundations on international trade and foreign direct investment (FDI) have been much analyzed, little analysis of languages' transaction costs has been done in either the international relations or international business...

We examine the roles of major trade languages in international trade and foreign direct investment (FDI) flows. Empirical results confirm that speaking a common language increases trade and FDI flows, yet the effect of major languages is more substantial in FDI than in international trade. In...