CEO’s with global experience and outward foreign direct investment: a contextualized analysis of Chinese firms
ISSN: 1750-614X
Article publication date: 2 June 2020
Issue publication date: 15 March 2021
Abstract
Purpose
This paper aims to examine the effect of chief executive officers (CEOs’) global experience (GE) on the Chinese firms’ outward foreign direct investment (OFDI) and provides new insights on how CEOs’ foreign study and education experiences may affect firms’ OFDI. Further, this paper examines whether CEO power and state ownership have a positive moderating effect on the relationship between CEOs’ GE and firms’ OFDI.
Design/methodology/approach
This study used panel data of Chinese manufacturing companies in 2007-2016 to examine different hypotheses. The authors tested them using a zero-inflated negative binomial regression model to shed light on the effect of CEOs’ GE on the firms’ OFDI.
Findings
This study found that CEOs’ GE generally promotes Chinese firms’ OFDI. CEOs’ foreign study experience has a stronger effect than foreign education experience. Further, CEO power and state ownership have a positive moderating effect on the relationship between CEOs’ GE and firms’ OFDI.
Research limitations/implications
The findings have two important implications for managers and policy-makers. First, globally experienced CEOs are vital for firms to succeed in today’s highly competitive global environment. Second, CEO power is important in firms’ OFDI decision-making.
Originality/value
The authors use path dependency and upper echelons theories to show that GE, particularly foreign study experience, enables CEOs to take advantage of available resources in the market and institutional environment to create a path for the firm to expand globally.
Keywords
Acknowledgements
We acknowledge financial support from the Humanity and Social Science Foundation of the Ministry of Education of China (17YJC630112) and the National Natural Science Foundation of China (Grants No. 71702084 and 71372179). Qiao is the corresponding author.
Citation
Sun, K., Fung, H.-G., Zeng, Y. and Qiao, P. (2021), "CEO’s with global experience and outward foreign direct investment: a contextualized analysis of Chinese firms", Chinese Management Studies, Vol. 15 No. 1, pp. 1-23. https://doi.org/10.1108/CMS-11-2019-0405
Publisher
:Emerald Publishing Limited
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