This Microsoft paper within their Typography and Cleartype section titled, The science of word recognition, comments on evidence within cognitive psychology that indicates we use the letters within words to recognize a word. Outline, shape and recognition playing an important role related to the semiotic aspect on the recognition and use of language.
Interestingly the paper comments on the the term bouma; a synonym for word shape, which first appeared in Paul Saenger’s 1997 book Space Between Words. It is an interesting read.