Nearly half the executives at global companies believe language barriers have spoiled cross-border deals and caused financial losses for companies, says a report from the Economist Intelligence Unit, a business research unit of Economist Group, the Economist magazine's parent.

The report, sponsored by language-training company EF Education First, was based on a poll of 572 senior executives world-wide.

Executives at companies based in Brazil and China said they were most affected by misunderstandings, with 74% and 61%, respectively, reporting financial losses as a result of failed international deals.

Nearly two-thirds of respondents said that misfires in their internal cross-border communications resulted in lost productivity. Among Brazilian managers, the figure jumped to 77%.

To improve communications, many global companies are trying to adopt English as an official language. A multilingual approach 'is inefficient and can prevent important interactions from taking place and get in the way of achieving key goals,' Harvard Business School professor Tsedal Neeley wrote in this month's Harvard Business Review.

But English-only policies can build other communication obstacles, she wrote, because non-native speakers may withdraw from group projects, lose self-confidence or ignore the rules entirely.

Communication difficulties are becoming increasinglycostly as companies seek to expand their operations globally. More than three-quarters of the companies surveyed said they expect to have an operational presence in more countries in the next three years, and nine in 10 said they expect their overseasclient base to grow; but 89% also said language and custom challenges are stifling their international plans.

Despite the need for a deeper understanding of cultural and linguistic differences, many companies have been slow to offer instruction in those areas. When they do take action, they mainly offer language classes and send managers to international markets to gain exposure to how their overseas colleagues operate.