Why Do Firms Employ Foreigners on Their Top Management Teams? A Multilevel Exploration of Individual and Firm Level Antecedents

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Why Do Firms Employ Foreigners on Their Top Management Teams? A Multilevel Exploration of Individual and Firm Level Antecedents

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Title: Why Do Firms Employ Foreigners on Their Top Management Teams? A Multilevel Exploration of Individual and Firm Level Antecedents
Author: Nielsen, Sabina; Nielsen, Bo Bernhard
Abstract: In Europe, in particular, the number of foreigners appointed to top management teams has increased significantly over the past decade. However, the question of why some firms elect to employ foreign nationals on their top management teams remains unclear. This study utilizes a multi-level methodology to test the degree to which employment of a foreigner on the top management team is driven by individual level human capital characteristics versus firm level strategic considerations. Results from empirical tests on a sample of Swiss publicly listed companies suggest that degree of international diversification is positively associated with the likelihood of having a foreign executive, whereas human capital characteristics do not explain the propensity to employ a foreigner on the top management team. Further analyses indicate that nationality diversity at the board level, as well as the international experience of the top management team, are possible predictors of the probability of having a foreigner on the top management team.
URI: http://hdl.handle.net/10398/7469
Date: 2008-07-23

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