01275nas a2200133   4500008004100000245009200041210006900133260000900202520074200211653003200953100001600985700002001001856012001021       2014                        eng d00aThe Power of Words: How, Why, and When Do Language Barriers Affect Alliance Formation?"0 aPower of Words How Why and When Do Language Barriers Affect Alli  c20143 aWe extend previous research on language issues within firms by examining the strategic consequences of language barriers between firms. We elaborate underlying mechanisms of how, why, and when language differences matter in the selection of cross- border R&D partners. We develop a language distance construct which captures relative differences in linguistic structure for any language pair. We hypothesize and find situations in which language differences help, rather than hinder alliance formation. Our empirical results suggest an inverted U-shaped relationship between language distance and the likelihood of alliance formation. This relationship is further moderated by potential partners’ prior ties and technological distance.10aStrategy & Entrepreneurship1 aJoshi, Amol1 aLahiri, Nandini  u/biblio/power-words-how-why-and-when-do-language-barriers-affect-alliance-formation