Returnee Directors in Korean Firms: Drivers and Influence

Abstract

An increasing proportion of students from emerging developing economies study overseas in economically and academically advanced regions such as North America and Western Europe before returning to their home countries to pursue academic or management careers. This paper focuses on international returnees as board members in major Korean corporations and empirically examines whether the presence of returnee directors is the effect or the cause of corporate behaviors or status in terms of export orientation, R&D intensity, and foreign ownership. Largely building on upper echelons theory and incorporating perspectives from theories of resource dependence, signaling effects, and organizational legitimacy, we develop and test hypotheses regarding the antecedents and the influence of returnee directors in large Korean firms. Our results partially supported the hypotheses that firms with stronger export orientation, R&D expenditure over sales, and foreign ownership have more returnee directors in their boards. We also found evidence that a higher proportion of returnee directors on a board was positively associated with R&D intensity and foreign ownership of the firm.