Languages and corporate savings behavior

Chen, S; Cronqvist, H; Ni, S; Zhang, F

Languages and corporate savings behavior

Chen, S Cronqvist, H Ni, S Zhang, F

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: Journal of Corporate Finance, 2017, 46, pp. 320-341
Issue Date:: 2017-10-01

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Field	Value	Language
dc.contributor.author	Chen, S
dc.contributor.author	Cronqvist, H
dc.contributor.author	Ni, S
dc.contributor.author	Zhang, F
dc.date.accessioned	2022-08-02T03:43:28Z
dc.date.available	2022-08-02T03:43:28Z
dc.date.issued	2017-10-01
dc.identifier.citation	Journal of Corporate Finance, 2017, 46, pp. 320-341
dc.identifier.issn	0929-1199
dc.identifier.issn	1872-6313
dc.identifier.uri	http://hdl.handle.net/10453/159482
dc.description.abstract	Speakers of strong future time reference (FTR) languages (e.g., English) are required to grammatically distinguish between future and present events, while speakers of weak-FTR languages (e.g., Chinese) are not. We hypothesize that speaking about the future in the present tense may result in the belief that adverse credit events are more imminent. Consistent with such a linguistic hypothesis, weak-FTR language firms are found to have higher precautionary cash holdings. We report additional supportive results from changes in the relative importance of different languages in a country's business domain, evidence from within one country with several distinct languages, and results related to changes following a severe financial crisis. Our evidence introduces a new explanation for heterogeneity in corporate savings behavior, provides insights about belief formation in firms, and adds to research on the effects of languages on economic outcomes.
dc.language	English
dc.publisher	Elsevier
dc.relation.ispartof	Journal of Corporate Finance
dc.relation.isbasedon	10.1016/j.jcorpfin.2017.07.009
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1502 Banking, Finance and Investment
dc.subject.classification	Finance
dc.title	Languages and corporate savings behavior
dc.type	Journal Article
utslib.citation.volume	46
utslib.for	1502 Banking, Finance and Investment
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2022-08-02T03:43:27Z
pubs.publication-status	Published
pubs.volume	46

Abstract:

Speakers of strong future time reference (FTR) languages (e.g., English) are required to grammatically distinguish between future and present events, while speakers of weak-FTR languages (e.g., Chinese) are not. We hypothesize that speaking about the future in the present tense may result in the belief that adverse credit events are more imminent. Consistent with such a linguistic hypothesis, weak-FTR language firms are found to have higher precautionary cash holdings. We report additional supportive results from changes in the relative importance of different languages in a country's business domain, evidence from within one country with several distinct languages, and results related to changes following a severe financial crisis. Our evidence introduces a new explanation for heterogeneity in corporate savings behavior, provides insights about belief formation in firms, and adds to research on the effects of languages on economic outcomes.

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http://hdl.handle.net/10453/159482