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Recent studies in a wide range of fields have related language to a number of characteristics including trust, cognition, perception, and sense-making. Language is a key aspect of international business, but thus far it has been studied mainly from a cross-cultural perspective (Brannen, Piekkari, & Tietze, 2014). In this paper, we argue that the effects of language run much deeper and can affect real aspects of national competitive advantage. In particular, we demonstrate that language structure affects a nation’s innovation performance. This insight is novel and relevant for both theoretical and practical aspects of international business, with particular significance for enterprise-oriented global innovation strategies as well as for tailoring government policies and regulations.

Understanding the different levels of innovative output between countries has been a major issue of interest for academics, practitioners, and policymakers alike. What factors allow certain nations to attain and maintain competitive edge, positioning themselves as global innovation leaders? Responses to this question have led governments and agencies worldwide to adopt a wide range of policies as they seek to stimulate their domestic economies, enhance military strength, and attain global influence and independence. Similarly, multinational corporations and other global business actors continuously evaluate nations’ relative capacity and positioning vis-à-vis innovation. These business players actively utilize this knowledge when they develop strategies to source and cultivate new technologies and ideas, locate research and development infrastructure, procure human capital …