Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing

Marketa Rickley and Samina Karim

Journal of World Business, 2018, vol. 53, issue 5, 740-751

Abstract: Based on the insight that superior access to knowledge can help foreign firms overcome liabilities of foreignness, we examine whether possession of firm-specific advantages shifts foreign firms’ CEO staffing strategies from local managers, who provide host-market insight, toward expatriates, who possess knowledge transfer and coordination capabilities. We find that, as institutional distance increases, firm-specific advantages from multinationality, regional agglomeration, and host-country experience substitute for the host-market insight of local CEOs. Foreign firms with such advantages instead staff the CEO role with expatriates. Our results are practically relevant to MNCs seeking to allocate a limited talent pool across different institutional contexts.

Keywords: CEO selection; Multinational companies (MNCs); Institutional distance; Liabilities of foreignness; Executive staffing (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:53:y:2018:i:5:p:740-751

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DOI: 10.1016/j.jwb.2018.05.002

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