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Does Board Co-Working Experience Influence Directors’ Decisions Toward Internationalization?

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Abstract

Despite the importance of board capital in a firm’s corporate strategic orientation and the high degree of international expansion that many firms have experienced in recent years, little or no research has explored how board capital affects a firm’s internationalization decision. Drawing upon resource dependence theory, this study argues that board capital may help increase the firm’s degree of internationalization and that board co-working experience may facilitate the contribution of directors with human and social capital to firm internationalization. The results indicate that board capital (directors’ international experience, directors’ industry-specific experience and directors’ board appointments) is positively associated with internationalization and that board co-working experience has a positive moderating influence on the board capital-internationalization relationship. One important implication of the empirical evidence is that firms trying to expand internationally should consider nominating directors with rich human and social capital to the board because such directors can provide strategic advice and facilitate access to critical information and valuable resources needed for internationalization. Additionally, those international firms might be advised to consider board tenure when appointing board directors because board co-working experience allows directors to integrate their knowledge of the firm’s internal affairs with their expertise in the area of international strategy and to combine their knowledge properly to address firm-specific issues, consequently enabling them to address international issues effectively.

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Acknowledgements

The authors would like to thank Editor-in-Chief Joachim Wolf and two anonymous reviewers for their helpful comments during the review process. This research was supported by Ministry of Science and Technology, R.O.C. (MOST 103-2410-H-327 -014).

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  1. Department of Finance, National Kaohsiung First University of Science and Technology, Kaohsiung, Taiwan, ROC

    Hsiang-Lan Chen

  2. National Taichung University of Science and Technology, Taichung, Taiwan, ROC

    Chiao-Yi Chang

  3. Ming Chuan University, Taipei, Taiwan, ROC

    Wen-Tsung Hsu

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Chen, HL., Chang, CY. & Hsu, WT. Does Board Co-Working Experience Influence Directors’ Decisions Toward Internationalization?. Manag Int Rev 57, 65–92 (2017). https://doi.org/10.1007/s11575-016-0309-4

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