VoxEU Column

Language subsidies to improve knowledge transfers from multinational companies

Developing countries regularly use financial incentives to attract multinational companies in the hope of stimulating knowledge transfers and positive spillovers. This column analyses the role of language frictions in impeding transfers of management knowledge within multinationals using survey and experimental evidence from Myanmar. It finds that potential employers value higher English efficiency and prior multinational experience, and an English language course treatment is shown to improve the English ability of domestic managers, increase their interactions with foreign managers, and increase their involvement in the management of company personnel.