According to a study at UCLA, reported on EurekaAlert!, young children acquiring language benefit most from conversations. Reading them stories and talking to them are also helpful, but two-sided conversations have much stronger effects on their language development.
A study of language use in 275 families looked at the affects of conversation, adult monologueing, reading aloud and watching TV. It found that the one with the greatest positive effect on language development was conversation, which had up to six times more benefit than the other activities, while watching TV had neither positive nor negative effects.
The more children take part in conversations, the more opportunities they have to learn from their mistakes and use new words. The interactions of conversation are also important for social, emotional and cognitive development.