Do interlocks by different types of directors affect the nature of internationalization strategy of emerging market multinationals?

Saneesh Edacherian and Vidya Sukumara Panicker

International Business Review, 2022, vol. 31, issue 4

Abstract: Research that links boards in general and interlocks in particular with internationalization activities of emerging market multinationals (EMNEs) has recently garnered significant attention. However, a focused examination of the impact of the interlocks of different types of directors on the nature of EMNE internationalization strategy is missing. To address this gap, we use an integrated agency–resource dependence perspective to distinguish board interlocks provided by inside directors from those provided by independent directors to demonstrate their impact on exploratory and exploitative internationalization. We test our hypotheses on 1996 observations of Indian firms between 2011 and 2017. Our results show that while inside director interlocks promote exploitative strategies over exploratory internationalization strategies, independent director interlocks deter exploitative internationalization. Furthermore, these preferences are contingent upon the R&D intensity of the firm.

Keywords: Board of directors; Director interlocks; Exploratory internationalization; Exploitative internationalization; Insider director interlocks; Independent director interlocks; Emerging market multinationals (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:31:y:2022:i:4:s0969593121001712

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DOI: 10.1016/j.ibusrev.2021.101953

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