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Performance Outcome of Leadership Succession at Foreign Subsidiaries in Japan. Does Nationality Matter?

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  • Fabian Jintae Froese

    (Korea University Business School, Korea)

  • Ralf Bebenroth

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

Leadership succession has been an important topic for research and management practice because of its effect on firm performance. This study integrates leadership succession and expatriate staffing literatures by investigating performance outcomes of leadership succession at foreign subsidiaries in Japan. We distinguished four types of CEO successors: expatriate followers (expatriate succeeds another expatriate), localizers (local manager succeeds an expatriate), local followers (local manager succeeds another local manager), and ambassadors (expatriate succeeds a local manager). Our theory and evidence from 2,113 firm-year observations, including 521 successions, suggests that successor types have direct and moderating effects with contextual firm-level factors on subsidiary performance. We extend agency theory by showing that both local and foreign subsidiary CEOs pursue their own, unique interests affecting firm performance in different ways.

Suggested Citation

  • Fabian Jintae Froese & Ralf Bebenroth, 2012. "Performance Outcome of Leadership Succession at Foreign Subsidiaries in Japan. Does Nationality Matter?," Discussion Paper Series DP2012-07, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2012-07
    as

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    File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2012-07.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. David M Brock & Oded Shenkar & Amir Shoham & Ilene C Siscovick, 2008. "National culture and expatriate deployment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(8), pages 1293-1309, December.
    3. Bruce Kogut & Harbir Singh, 1988. "The Effect of National Culture on the Choice of Entry Mode," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 19(3), pages 411-432, September.
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