The impact of dialect distance on firm performance in underdeveloped counties

Evidence from urban agglomerations

Bibliographic Data

ID17832010
AuthorsShaopeng Zhang (0000-0003-4415-1815, Northeast Forestry University), Q Li (0000-0002-9724-5439, Southwestern University of Finance and Economics, corresponding author), Shubin Wang (0000-0002-0244-7063, Nanjing University of Finance and Economics), Jing Yang (0009-0004-1715-4513, Beijing Normal University)
Year2026
Publication date2026-03-23
Open AccessYes
TypeARTICLE
VenueHumanities and Social Sciences Communications (JOURNAL)
Journal identifiersISSN: 2662-9992 • E-ISSN: 2662-9992
PublisherPalgrave Macmillan (PUBLISHER • GB)
DOI10.1057/s41599-026-07022-4
OpenAlexW7140138751
LanguageEN
References cited37

This paper examines the effect of dialect distance on firm performance in underdeveloped counties within urban agglomerations, using dialect similarity as a conceptual entry point and firms as the primary unit of analysis. Drawing on a panel of 33,228 firm-year observations from underdeveloped counties from 2012 to 2015, we employ a fixed-effects model to identify the causal influence of dialect similarity on firm performance and explore the underlying mechanisms. We document several key findings: (a) greater dialect similarity significantly improves firm performance in these regions; (b) this effect is stronger among older firms and more pronounced in non-state-owned enterprises; (c) the positive impact is amplified in urban agglomerations with higher internet development, greater urban primacy, and higher per capita GDP; (d) dialect similarity enhances performance through increased sales, lower sales and financing costs, higher capital investment, and improved human capital; (e) further analysis suggests that cultural effects, rather than communication effects, drive the results. The study offers theoretical insights and policy implications for promoting common prosperity at the urban agglomeration level

Economies of agglomeration · Human capital · Panel data · Per capita · Prosperity · Urban agglomeration · Global Urban Networks and Dynamics · Innovation and Knowledge Management · Regional Economics and Spatial Analysis

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