The literature has paid scant attention to the role of linguistic time reference in explaining entrepreneurial activity. It has been argued that certain languages explicitly distinguish between the present and the future, whereas others do not. As a result, how entrepreneurship evolves in countries where the spoken language has explicit future tense marking remains a moot question. To debate this, we assemble cross-national data and assess the role of linguistic time reference in driving entrepreneurial behavior. We also analyze whether this behavior differs across advanced and emerging economies and relatedly, the contextual moderators that influence this behavior. The findings reveal that countries whose primary language explicitly distinguishes between the present and the future experience higher business failures, consistent with excessive risk-taking. The magnitude of the response differs across country groupings and underscores the relevance of the distance hypothesis and the precision hypothesis in driving such behavior.
Saibal Ghosh (Wed,) studied this question.