Gaijin invasion? A resource dependence perspective on foreign ownership and foreign directors |
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| Institution: | 1. Swansea University, United Kingdom;2. International Business School Suzhou, Xi''an Jiaotong-Liverpool University, 8 Chongwen Road, Suzhou, 215123, China;3. DAN Department of Management and Organizational Studies, The University of Western Ontario, Canada;4. University of Aberdeen Business School, King’s College, University of Aberdeen, United Kingdom;5. School of Marketing and Communication, University of Vaasa, Finland;6. University of Kent, Canterbury, CT2 7FS, United Kingdom;1. Telfer School of Management, University of Ottawa, Ottawa, Canada;2. Robinson College of Business, Georgia State University, Atlanta, Georgia, USA;3. Goa Institute of Management, Goa, India;1. Hamburg School of Business Administration, Willy-Brandt-Straße 75, 20459, Hamburg, Germany;2. Alliance Manchester Business School, Booth Street West, M156PB, Manchester, UK;3. School of Business, Society and Engineering, Mälardalen University, Sweden & Department of Strategy and Entrepreneurship, BI Norwegian Business School, Norway;1. School of Economic & Management, Chang’an University, Xi’an 710064, Shaanxi, China;2. Business School, Hohai University, 8 Focheng West Road, Jiangning, Nanjing 211100, Jiangsu, China;3. School of Business, University of International Business and Economics, Beijing 100029, China;1. School of Marketing and Communication, University of Vaasa, Wolfintie 34, 65200, Vaasa, Finland;2. Innovation, Technology and Entrepreneurship, College of Business and Economics, United Arab Emirates University, P.O. Box 15551, Al Ain, United Arab Emirates;3. School of Technology and Innovations, Industrial Management, University of Vaasa, Wolfintie 34, 65200 Vaasa, Finland |
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| Abstract: | While boards around the globe are becoming more international, the reasons behind this internationalization are not fully understood. In this study, we suggest that foreign ownership increases the presence of foreign directors on boards. Based on resource dependence theory, we argue that the dependence on foreign owners makes foreign nationals an important resource for firms. Using data from large Japanese stock market firms and employing logistic regression analysis, we find empirical evidence that greater dependence on foreign, i.e. gaijin, owners is associated with a higher probability to have foreign directors on the board. We also demonstrate that the link between foreign ownership and foreign directors is positively moderated by a firm’s foreign market exposure. We conclude that firms consider foreign directors a viable response to the deviant expectations of foreign owners. |
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| Keywords: | Board internationalization Board of directors Firm internationalization Foreign directors Foreign owners Japan Ownership Resource dependence theory |
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