 Should I stay or should I go? The influence of managerial self-interest on foreign exit decisionsQun Tan and Carlos M.P. Sousa Journal of Business Research, 2023, vol. 168, issue C Abstract: Based on the agency theory and the social exchange theory, this study investigates how foreign affiliate (FA) managers can utilise two mechanisms that the principal adopts to deal with the agency problem of influencing the foreign divestment/non-divestment decision of the headquarters (HQ). Specifically, we examine whether and under which conditions FA managers’ self-interest affects the decision of the HQ to divest a foreign market. Using secondary and primary data collected from multiple informants in Chinese firms engaged in outward foreign direct investment (OFDI), we find that although the FA managers’ self-interest has no direct impact on the HQ’s foreign divestment decision, the HQ is less likely to divest the foreign market when the FA manager holds a high level of trust in the HQ. Furthermore, when the FA is locally embedded in the foreign host market, the manager’s self-interest has the strongest negative impact on the HQ’s foreign divestment decision. Keywords: Managerial self-interest; Agency theory; Social exchange theory; Trust; Local embeddedness; Foreign divestment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:168:y:2023:i:c:s0148296323005726 DOI: 10.1016/j.jbusres.2023.114213 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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