Cross-Border Communication and Private Participation Projects: The Role of Genealogical Language Distance

This paper investigates the impact of genealogical language distance in cross-border communication on private participation infrastructure projects. Our analysis of 5440 projects in 64 countries (1990-2004) shows that the probability of success of private participation projects is lower in countries characterized by a larger genealogical language distance. We also find that this effect is weaker when the project involves a local investor or the host country government. In contrast, the same effect is strengthened when the project is greenfield. Finally, including the host country government as an investor in the project has no moderating effect in the effect of genealogical language distance on private participation projects.