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CEO international experience: Effects on strategic change and firm performance

Author

Listed:
  • Son Le

    (Louisiana Tech University)

  • Mark Kroll

    (The University of Texas Rio Grande Valley)

Abstract

Despite the growing importance of CEOs’ international experience (IE), we have yet to gain sufficient insights into its conceptualization and effect on firm outcomes. Based on prior research and work experience models, we suggest a new framework for measuring IE, including three components: length of time, number of countries, and cultural distance, along with their interactions. Drawing upon social and cognitive learning theories, we explore the impact of CEOs’ IE on two outcomes: strategic change and firm performance. We argue that IE components affect the two outcomes by enhancing executives’ international knowledge and general competencies. While international knowledge may affect firm performance directly, general competencies may affect firm performance both directly and indirectly through strategic change. Using a sample of 387 new CEOs, we found that time abroad had a positive effect on strategic change and firm performance, while number of countries and cultural distance positively moderated these relationships. Additionally, we also found that these components affected firm performance both directly and mediated through strategic change. Our findings have important theoretical implications for the conceptualization and impact of CEOs’ IE and practical implications for executive development and promotion.

Suggested Citation

  • Son Le & Mark Kroll, 2017. "CEO international experience: Effects on strategic change and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(5), pages 573-595, July.
    • Handle: RePEc:pal:jintbs:v:48:y:2017:i:5:d:10.1057_s41267-017-0080-1
    DOI: 10.1057/s41267-017-0080-1
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