https://orcid.org/0000-0002-1727-0563
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ABSTRACT
Hiring overseas-returned executives is increasingly regarded by researchers and society as an important business strategy. This paper investigates the effects of overseas-returned executives in the top management team on firms in China. We propose a mechanism-based framework to study how overseas-returned executives affect firm innovation. Using listed companies in China’s manufacturing industry, we find that overseas-returned executives have a positive effect on firm innovation, especially for high-tech firms, large firms, state-owned firms and returned executives with foreign work experience. Increase in research and development investment is an important channel through which overseas-returned executives affect firm innovation.
Acknowledgments
Financial support from National Natural Science Foundation of China (71974076), The Ministry of Education of Humanities and Social Science Project (23YJC880025), Guangdong Basic and Applied Basic Research Foundation (2022A1515110259) is gratefully acknowledged.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1. In closely related research, Zhang and Fu (Citation2022) examine the role of overseas-returned executives in optimizing the short-term financial performance measured by return on assets (ROA). And mechanism analysis shows that overseas-returned executives influence such performance mainly through the risk-taking mechanism. By contrast, this paper focuses on the influence of overseas-returned executives in the top management team on firm innovation performance. We introduce and find a new channel through which overseas-returned executives affect firm innovation: increase in research and development investment.