Global Palette: The Impact of Immigrant Talent on Multinational Product Strategy

Dany Bahar, Natalie Carlson and Exequiel Hernandez
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Dany Bahar: Brown University
Natalie Carlson: Columbia University [New York], Columbia Business School - Columbia University [New York]
Exequiel Hernandez: University of Pennsylvania, The Wharton School - University of Pennsylvania

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Abstract: We examine how human capital at an MNC's headquarters affects its foreign product expansion choices. We theorize that immigrant workers hired at HQ are channels of country-specific knowledge and connections that facilitate three types of product-related decisions in their home country markets: launching new products, updating existing products, and adapting products to local conditions. Drawing on two remarkably fine-grained datasets, we examine 74,906 product launches by 340 US-based multinationals in the consumer packaged goods industry in 83 foreign markets during 2009-2019, matched to 7,876 skilled immigrant hires (on H-1B visas) by these firms over the same time period. The more immigrants from a given country a firm hires in the US, the more its subsequent products in that country exhibit locally-specific features. Hiring immigrants also leads to more frequent updates of preexisting products, especially in culturally distant markets relative to the US. Immigrants also help firms launch more new products in geographically distant countries after they are hired. These associations are stronger for more culturally-specific products (i.e., food and beverages vs. household and personal care) and hold only when immigrants occupy product-related roles (e.g., R&D, marketing, management) but not when they have non-product-related roles (e.g. accounting). Our study provides granular insights on the role of human capital across critical phases of global product strategy: new product development, local adaptation capability, and ongoing product management.

Keywords: Immigration; Talent; Global Strategy; Products; Internationalization (search for similar items in EconPapers)
Date: 2023-12
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