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Management International Review

, Volume 49, Issue 4, pp 409–431 | Cite as

Technological Competence and International Diversification

The Role of Managerial Incentives
  • Laszlo TihanyiEmail author
  • Robert E. Hoskisson
  • Richard A. Johnson
  • William P. Wan
Research Article

Abstract

  • This paper shows that the role of managerial incentives is highlighted by a relatively complex relationship between technological competence and international diversification. By studying a sample of Standard & Poor’s 500 member firms, we explore the relationships between technological competence, managerial pay, and international diversification.

  • Results indicated a curvilinear relationship (an inverted U-shape) between technological competence and international diversification.

  • In line with agency theory, contingent pay (stock options and bonuses) was positively related to international diversification.

  • Beyond these direct effects, both contingent and non-contingent pay (cash compensation) moderated the relationship between technological competence and international diversification.

Keywords

International strategy Corporate governance Managerial compensation Innovation 

Notes

Acknowledgements

We thank Lorraine Eden, Michael A. Hitt, and Stephen Tallman as well as the editors and anonymous reviewers of the mir Focused Issue for their helpful comments and suggestions.

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Copyright information

© Gabler-Verlag 2009

Authors and Affiliations

  • Laszlo Tihanyi
    • 1
    Email author
  • Robert E. Hoskisson
    • 2
  • Richard A. Johnson
    • 3
  • William P. Wan
    • 4
  1. 1.Department of Management, Mays Business SchoolTexas A&M UniversityCollege StationUSA
  2. 2.Jesse H. Jones Graduate School of BusinessRice University HoustonHoustonUSA
  3. 3.Department of Management, Robert J. Trulaske, Sr. College of BusinessUniversity of MissouriColumbiaUSA
  4. 4.Area of Management, Rawls College of BusinessTexas Tech UniversityLubbockUSA

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