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Do interlocks by different types of directors affect the nature of internationalization strategy of emerging market multinationals?
Institution:1. IMT Business School, Dubai;2. School of Business and Economics, Loughborough University, United Kingdom;1. School of Economics, Business Administration and Accounting in Ribeirão Preto (FEA-RP), University of São Paulo (USP), Brazil;2. Department of Accounting, School of Economics, Business Administration and Accounting in Ribeirão Preto (FEA-RP), University of São Paulo (USP), Av. dos Bandeirantes, 3900, FEA-RP, ZIP, 14040-905 Ribeirão Preto, São Paulo, Brazil;1. Adelaide Business School, The University of Adelaide, Adelaide, SA 5005, Australia;2. Ted Rogers School of Management, Ryerson University, Toronto, ON M5B 2K3, Canada;1. New York University Stern School of Business, Henry Kaufman Management Center Department of Economics, 44 West Fourth Street, 7-90, New York, NY 10012, USA,;2. University of Birmingham, Birmingham Business School, Department of Strategy & International Business, Edgbaston Park Road, Birmingham B15 2TY, UK;3. University of Sussex, Department of Strategy & Marketing, Sussex House, Falmer, Brighton BN1 9RH, UK;1. China Academy of Cross-border E-commerce, School of Economics, Zhejiang University, 38 Zheda Road, Hangzhou 310027, China;2. Ningbo Research Institute, China Academy of Cross-border E-commerce, Zhejiang University, 1689 Jiangnan Road, Ningbo 315048, China;3. The York Management School, University of York, Heslington, York YO10 5DD, UK;1. Department of Management, Monash Business School, Monash University, Caulfield Campus, Caulfield East, Victoria 3145, Australia;2. Professor of International Business, The Business School, University of South Australia, North Terrace, Adelaide 5001, South Australia, Australia;3. Université Paris-Saclay, UVSQ, Larequoi, 78000 Versailles, France;4. Department of Economics and Management, University of Florence, Via delle Pandette, 9, 50127 Firenze, Italy
Abstract:Research that links boards in general and interlocks in particular with internationalization activities of emerging market multinationals (EMNEs) has recently garnered significant attention. However, a focused examination of the impact of the interlocks of different types of directors on the nature of EMNE internationalization strategy is missing. To address this gap, we use an integrated agency–resource dependence perspective to distinguish board interlocks provided by inside directors from those provided by independent directors to demonstrate their impact on exploratory and exploitative internationalization. We test our hypotheses on 1996 observations of Indian firms between 2011 and 2017. Our results show that while inside director interlocks promote exploitative strategies over exploratory internationalization strategies, independent director interlocks deter exploitative internationalization. Furthermore, these preferences are contingent upon the R&D intensity of the firm.
Keywords:Board of directors  Director interlocks  Exploratory internationalization  Exploitative internationalization  Insider director interlocks  Independent director interlocks  Emerging market multinationals
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