The Effect of Outside CEO Successor and R&D Intensity on Internationalization

초록

Based on the upper echelons theory and the resource-based view (RBV), our study examines the interaction effect of the outside CEO successor and the level of R&D intensity on a firm's degree of internationalization. We hypothesized that both motivation (outside the CEO successor's willingness to make a strategic move) and capability (the technological capability enabling the strategic move) are key factors in successfully pursuing a firm's internationalization. Using samples from Korean manufacturing firms for the period from 2008 through 2015, we analyzed CEO turnover data (N = 121) of 89 firms. Our results confirm that outside CEO succession is positively related to the internationalization of firm sales. However, the firm’s degree of R&D intensity itself was not significantly associated with its internationalization. The highest degree of internationalization was achieved when both conditions – outside CEO successor as well as R&D intensity of a firm - were met. Our results indicate that the internationalization strategy would be a joint function of the strategic motivation of an outside CEO successor and the technological capability of a firm. While this finding is admittedly very tentative, it holds substantive promise for further investigation into the interactive effect of strategic motivations and firm capabilities on firm internationalization. This study also offers practical implications for firms that pursue internationalization.

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