The dominance of English language content on the Internet raises a question of how consumer bilingualism in a given country a§ects the amount of home language content and the countryís welfare. We address this question by studying two-sided market competition between a foreign and a domestic content distribution platform in a small open economy. On the one hand, bilingualism has the beneÖt of increasing cross-side network externalities by increasing consumer concentration on the foreign platform, which increases the amount of home language content. On the other hand, bilingualism exposes home language content to competition from foreign language content and softens platform competition, which reduces the amount of home language content. We Önd that bilingualism mostly increases consumer surplus but can reduce domestic producer surplus. The welfare e§ect of taxing the foreign platform is also analyzed.
Journal of International Economics, 2021, forthcoming