What induces corporations to engage in controversial marketing and environmental practices? A linguistic perspective

Abstract

PurposeLinguists classify the world’s languages into two types: futured and futureless. Futured languages (e.g. French) require speakers to grammatically mark future events, a construction that is optional in futureless languages such as German. This treatise examines whether the grammatical structure of the predominant language in a given country explains firms’ propensity to engage in controversial marketing and environmental management practices. This is expected to happen because a speaker’s future time perspective and temporal discounting vary depending on the type of language used.Design/methodology/approachThe sample period for this research was from 2001 to 2020. The sample of the study consists of 5,275 firms representing 47 countries. The sample is comprised of firms from 29 countries where the predominant language is a strong future time reference (FTR) language and 18 countries with a weak-FTR language. The maximum number of firm-country-year observations of the study was 39,956. This study employed multi-level mixed effects modelling as well as other relevant estimation techniques such as random effect panel regression, ordinary least square regression and two-stage least square regression.FindingsThis research empirically demonstrates that firms based in countries where the predominant language requires speakers to grammatically differentiate between the present and the future – known as strong-FTR or futured languages – engage more often in controversial marketing- and environment-related practices than those located in countries where the predominant language does not necessarily require grammatical differentiation between the present and the future (known as weak-FTR or futureless languages).Practical implicationsThe findings are important for managers of firms with foreign subsidiary operations: top management teams of such firms need to be aware that their foreign subsidiaries’ propensity to engage in controversial marketing and environmental management practices varies depending on the predominant language those subsidiaries use. Also, firms located in countries with weak-FTR languages need to be more rigorous in their selection process when considering forming a joint venture or acquiring a firm in countries with strong-FTR languages.Originality/valueThe current research enriches the burgeoning body of literature on the effect of language on corporate decision-making. It extends the body of knowledge on the impact of language structure on firms’ inclination to engage in controversial marketing and environmental management practices.