Do You Speak R&D? The Relationship of Language and the Intertemporal Choice of R&D Investments

Jacqueline Schulte

Student thesis: Master thesis


In recent years, research studying the relationship between language and individual- as well as organizational-level economic behavior has surfaced, proposing that the way a language grammatically relates to future events is associated with how decision makers decide in intertemporal choices. So far, the general conclusion is that weak Future Time Reference languages, those that talk about the future with present tense, are associated with higher levels of future- oriented behavior in intertemporal choices (Chen, 2013; Chen, Cronqvist, Ni, & Zhang, 2015; Sutter, Angerer, Glätzle-Rützler, & Lergetporer, 2015). This thesis questions this pre-existing notion. Instead, it is proposed that in the specific context of research and development (R&D) expenditures, strong Future Time Reference languages are associated with more future-oriented behavior than weak-FTR languages. The hypothesis is empirically tested by examining a total of over 4,000 publicly traded firms from 28 countries. The results support the hypothesis that organizations that speak strong Future Time Reference languages spend more on R&D activities than those that speak weak Future Time Reference languages, all else being equal. Even when accounting for a set of controls, this positive relationship remains significant. Next to the contribution of adding further insights into this topic, the results of this study also find application in business as well as in public policy domains, as they allow for an improved understanding of individual and organizational behavior.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2016
Number of pages76
SupervisorsNicolai J. Foss