International returnees as outside directors: A catalyst for strategic adaptation under institutional pressure

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Building on perspectives from corporate governance, resource dependence, and organizational learning, this paper investigates the ability of international returnees while acting as outside directors in corporate boards to influence strategic adaptation in the face of institutional pressure to adopt what are arguably more legitimate management practices. We empirically examine the restructuring efforts of large Korean firms in the early 2000s following the introduction of radically new board regulations by the government. To accomplish this we use a hierarchical linear modeling with repeated measures. Our results show that decreases in debt ratio and diversification level are greater for firms with more returnee outside directors. Such an association is strengthened by the extent of foreign experience held by returnee directors. In addition, the prestige of individual directors as well as support from foreign investors positively moderates the impact of returnee outside directors on strategic adaptation. (C) 2014 Elsevier Ltd. All rights reserved.
Publisher
ELSEVIER SCIENCE BV
Issue Date
2015-08
Language
English
Article Type
Article
Keywords

CORPORATE GOVERNANCE; FIRM PERFORMANCE; FINANCIAL PERFORMANCE; KNOWLEDGE TRANSFER; ORGANIZATIONAL CAPABILITIES; BOARD COMPOSITION; EMERGING MARKETS; DECISION-MAKING; TOP MANAGEMENT; NETWORK TIES

Citation

INTERNATIONAL BUSINESS REVIEW, v.24, no.4, pp.594 - 604

ISSN
0969-5931
DOI
10.1016/j.ibusrev.2014.10.015
URI
http://hdl.handle.net/10203/199984
Appears in Collection
MT-Journal Papers(저널논문)
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