01465nas a2200133   4500008004100000245007500041210006900116260000900185520095700194653003201151100001601183700002001199856011201219       2012                        eng d00aInformation Asymmetry and Partner Selection in International Alliances0 aInformation Asymmetry and Partner Selection in International All  c20123 aWe extend prior research on intra-firm language barriers by investigating inter-firm language barriers in cross-border alliances. Integrating concepts from sociolinguistics and information economics, we posit that language barriers between potential partners exacerbate information asymmetries, while market signals of the commercial value of a partner’s knowledge counteract these asymmetries. To test these ideas, we quantify language barriers using a distance measure of linguistic differences and we analyze data on semiconductor alliances during 1988-2001. Controlling for cultural, geographical, and technological distances, our empirical results suggest that firms overcome large language distances by relying on market signals of a prospective partner's level of disclosure, stock of knowledge, and degree of specialization. Stronger signals significantly dampen the negative impact of language distance on the chances of forming an alliance.10aStrategy & Entrepreneurship1 aJoshi, Amol1 aLahiri, Nandini  u/biblio/information-asymmetry-and-partner-selection-international-alliances