Executive Experience and Expansion Strategies of Multinational Firms

40 Pages Posted: 16 Nov 2020 Last revised: 23 Sep 2022

See all articles by Baptiste Souillard

Baptiste Souillard

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Date Written: July 29, 2022

Abstract

What helps firms expand abroad? In line with anecdotal evidence, this paper confirms that the experience of executives contributes to the internationalization process of multinational companies. It reveals a strong pattern between the recruitment of executives used to oversee business affairs in a given country and the probability of disclosing subsidiaries in this country in subsequent years. Interestingly, the link is more marked for foreign investments in low-income countries and senior executives such as chief operating officers. Evidence also reveals that only country-specific experience is determinant and that experience in managing multinational activities yields a compensation premium. Thus, the analysis shows that managers develop valuable country-specific knowledge and that companies invest in such expertise to step up their operations abroad.

Keywords: Foreign direct investments, multinational firms, subsidiaries, executives, executive experience, executive mobility

JEL Classification: F16, F23, H26, J62, M12

Suggested Citation

Souillard, Baptiste, Executive Experience and Expansion Strategies of Multinational Firms (July 29, 2022). Available at SSRN: https://ssrn.com/abstract=3700932 or http://dx.doi.org/10.2139/ssrn.3700932

Baptiste Souillard (Contact Author)

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

HOME PAGE: http://www.baptistesouillard.com/

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