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Top management team nationality diversity, corporate entrepreneurship, and innovation in multinational firms

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  • C Boone
  • B Lokshin
  • H Guenter
  • Rene Belderbos

Abstract

We integrate insights from upper echelon theory and the literature on innovation and multinational corporations (MNCs) to develop a framework explaining when and why nationality diversity in top management teams (TMTs) affects corporate entrepreneurship—as evidenced by diversity in global knowledge sourcing—and through this innovation performance in MNCs. In a panel of 165 manufacturing MNCs based in 20 countries, we confirm that the positive effects of TMT nationality diversity on corporate entrepreneurship and innovation are only unleashed in TMTs with low social stratification and in MNCs located in home countries that are low in national power distance. Our study contributes to opening up the black box of the upper echelon’s strategic role in spurring entrepreneurship and innovation in MNCs embedded in different cultures.

Suggested Citation

  • C Boone & B Lokshin & H Guenter & Rene Belderbos, 2018. "Top management team nationality diversity, corporate entrepreneurship, and innovation in multinational firms," Working Papers of Department of Management, Strategy and Innovation, Leuven 628565, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
  • Handle: RePEc:ete:msiper:628565
    Note: paper number MSI-1804
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