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Lingua franca proficiency and cross-border mergers and acquisitions: Language matters

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  • Zhang, Yuanyuan
  • Sun, Wenli
  • Du, Yaning

Abstract

The study explores the effect of lingua franca proficiency on cross-border mergers and acquisitions. Based on data from 2000 to 2019 in Zephyr database, we find that lingua franca proficiency measured by combined English score can promote cross-border M&As from deal value, deal number and success rate dimensions. Language output ability (writing and speaking skills) is more important that input ability (listening and reading). Also, its effect is more evident for countries with higher education level and unlisted firms. In addition, two main channels through which lingua franca proficiency functions are national openness extent and innovation capacity.

Suggested Citation

  • Zhang, Yuanyuan & Sun, Wenli & Du, Yaning, 2024. "Lingua franca proficiency and cross-border mergers and acquisitions: Language matters," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006974
    DOI: 10.1016/j.frl.2024.105667
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