Foreign Language Effect on Financial Risk-Taking: A Psycholinguistic Perspective on Economic Decision-Making
DOI:
https://doi.org/10.69760/portuni.26030007Keywords:
Foreign Language Effect, financial risk-taking, psycholinguistics, decision-making under uncertaintyAbstract
This article examines the Foreign Language Effect (FLE) in financial risk-taking from a psycholinguistic perspective. It argues that language is not only a medium of communication but also a factor shaping cognition, emotion, and decision-making under uncertainty. The study reviews theoretical approaches to the FLE, including dual-process theory, the emotional distance hypothesis, and the cognitive-effort account, and relates them to financial behavior such as loss aversion, framing sensitivity, and risk evaluation. It further discusses empirical research showing that decisions made in a foreign language may reduce emotional resonance and alter risk preferences, although the effect remains context-dependent and influenced by variables such as language proficiency, task type, and cultural background. Particular attention is given to the implications of these findings for multilingual financial communication in banking, investment advising, international business, and financial education. The article concludes that further interdisciplinary research is needed to better understand the role of language in financial judgment and behavior.
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