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Technological Competence and International Diversification

Author

Listed:
  • Laszlo Tihanyi

    (Texas A&M University)

  • Robert E. Hoskisson

    (Rice University Houston)

  • Richard A. Johnson

    (University of Missouri)

  • William P. Wan

    (Texas Tech University)

Abstract

This paper shows that the role of managerial incentives is highlighted by a relatively complex relationship between technological competence and international diversification. By studying a sample of Standard & Poor’s 500 member firms, we explore the relationships between technological competence, managerial pay, and international diversification. Results indicated a curvilinear relationship (an inverted U-shape) between technological competence and international diversification. In line with agency theory, contingent pay (stock options and bonuses) was positively related to international diversification. Beyond these direct effects, both contingent and non-contingent pay (cash compensation) moderated the relationship between technological competence and international diversification.

Suggested Citation

  • Laszlo Tihanyi & Robert E. Hoskisson & Richard A. Johnson & William P. Wan, 2009. "Technological Competence and International Diversification," Management International Review, Springer, vol. 49(4), pages 409-431, September.
    • Handle: RePEc:spr:manint:v:49:y:2009:i:4:d:10.1007_s11575-009-0002-y
    DOI: 10.1007/s11575-009-0002-y
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    3. Asmund Rygh & Gabriel R. G. Benito, 2022. "Governmental goals and the international strategies of state-owned multinational enterprises: a conceptual discussion," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(4), pages 1155-1181, December.
    4. Hang Le & Chris Brewster & Mehmet Demirbag & Geoffrey Wood, 2013. "Management Compensation Systems in MNCs and Domestic Firms," Management International Review, Springer, vol. 53(5), pages 741-762, October.
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