Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

CEO international experience and firm performance revisited: What’s culture got to do with it?

CEO international experience and firm performance revisited: What’s culture got to do with it? This paper examines the relationship between chief executive officer (CEO) international experience (IE) and firm performance. The authors also examine the symmetry of this relationship, whereby home and host countries would be interchangeable without any significant change in the impact of each cultural dimension on firm performance.Design/methodology/approachFor a sample of CEOs from Fortune's list of Global 500 companies, firm performance was measured as average net margin for the first four years of CEO tenure. IE was the difference between home country culture and that where CEO experience was gained, based on the GLOBE cultural dimensions. Regression then tested the IE/firm performance relationship. For symmetry, distance direction was coded as either positive or negative, depending on whether home country score on a given dimension was higher or lower than that of the host. Moderator regression then tested for whether distance direction impacted the relationship between IE and firm performance.FindingsResults show that overall distance between home and host cultures in aggregate does not have a significant effect on firm performance. However, for specific dimensions, greater distances between the CEO's countries of experience and that of the parent company on in-group collectiveness and performance orientation are associated with higher firm performance, and greater distances on power distance and assertiveness are associated with lower performance. The authors further find asymmetric patterns in the IE–performance relationship, attributable primarily to the fact that, when scores on performance orientation are greater for the home than host country, organizational performance is significantly enhanced.Originality/valueThis study's hypotheses are grounded in theory, combining the human capital perspective with cultural paradox theory. In addition, the authors offer a unique approach for measuring the dimensional distance of culture. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Global Mobility The Home of Expatriate Management Research Emerald Publishing

CEO international experience and firm performance revisited: What’s culture got to do with it?

Download PDF
20 pages

Loading next page...
 
/lp/emerald-publishing/ceo-international-experience-and-firm-performance-revisited-what-s-Dx6nsZkPMZ

References (97)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2049-8799
DOI
10.1108/jgm-01-2023-0005
Publisher site
See Article on Publisher Site

Abstract

This paper examines the relationship between chief executive officer (CEO) international experience (IE) and firm performance. The authors also examine the symmetry of this relationship, whereby home and host countries would be interchangeable without any significant change in the impact of each cultural dimension on firm performance.Design/methodology/approachFor a sample of CEOs from Fortune's list of Global 500 companies, firm performance was measured as average net margin for the first four years of CEO tenure. IE was the difference between home country culture and that where CEO experience was gained, based on the GLOBE cultural dimensions. Regression then tested the IE/firm performance relationship. For symmetry, distance direction was coded as either positive or negative, depending on whether home country score on a given dimension was higher or lower than that of the host. Moderator regression then tested for whether distance direction impacted the relationship between IE and firm performance.FindingsResults show that overall distance between home and host cultures in aggregate does not have a significant effect on firm performance. However, for specific dimensions, greater distances between the CEO's countries of experience and that of the parent company on in-group collectiveness and performance orientation are associated with higher firm performance, and greater distances on power distance and assertiveness are associated with lower performance. The authors further find asymmetric patterns in the IE–performance relationship, attributable primarily to the fact that, when scores on performance orientation are greater for the home than host country, organizational performance is significantly enhanced.Originality/valueThis study's hypotheses are grounded in theory, combining the human capital perspective with cultural paradox theory. In addition, the authors offer a unique approach for measuring the dimensional distance of culture.

Journal

Journal of Global Mobility The Home of Expatriate Management Research – Emerald Publishing

Published: Nov 7, 2023

Keywords: CEO experience; International experience; Human capital; Expatriate assignments; National culture; Cultural paradox; Organizational performance

There are no references for this article.