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CEO International Experience in Advanced Market Economies and Firm Investment Horizon in a Transitioning Economy

Published online by Cambridge University Press:  19 February 2024

Lipeng Gary Ge Open the ORCID record for Lipeng Gary Ge [Opens in a new window] ,
Alan Muller Open the ORCID record for Alan Muller [Opens in a new window] ,
Tianyu Gong Open the ORCID record for Tianyu Gong [Opens in a new window]  and
Cuili Qian Open the ORCID record for Cuili Qian [Opens in a new window]
Lipeng Gary Ge
Affiliation:
Department of Global Economics and Management, University of Groningen, Nettelbosje 2, 9747AE Groningen, The Netherlands
Alan Muller
Affiliation:
Department of Global Economics and Management, University of Groningen, Nettelbosje 2, 9747AE Groningen, The Netherlands
Tianyu Gong*
Affiliation:
School of Economics and Management, Tongji University, 1239 Siping Road, Shanghai, P.R. China,
Cuili Qian
Affiliation:
Organization, Strategy, and International Management, Naveen Jindal School of Business, University of Texas at Dallas, 800 West Campbell Road, Richardson, TX, USA
*
Corresponding author: Tianyu Gong (gongtianyu@tongji.edu.cn)
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Abstract

Building on the literature on managerial myopia, we investigate how chief executive officers’ (CEOs) international experience in advanced market economies affects their firms' investment horizons in a transitioning economy. To overcome myopia, CEOs should possess the knowledge needed to manage current tasks, thereby freeing up cognitive resources for future considerations. In the context of our theorizing, we argue that international experience in advanced market economies equips CEOs with knowledge about how to deal with their current tasks of market-oriented adaptation in a transitioning economy, freeing up cognitive resources for considering longer-term investment horizons. Additionally, the effect of CEO international experience in advanced market economies on firm investment horizon is stronger under conditions that increase the cognitive burden on CEOs to perform market-oriented adaptation tasks – specifically, when there is a high scope of pro-market reform, high intensity of foreign competition, analyst coverage, and a high level of institutional ownership. Our estimation based on a matched sample of 204 Chinese CEOs during the period 2002–2019 supports the majority of our predictions. Our study contributes to research on firm investment horizon, CEO international experience, and transition economies.

摘要

摘要

本文调查了首席执行官在发达市场经济体中的国际化经历如何影响公司在转型经济中的投资视野。从管理短视理论出发，首席执行官应该具备管理当前任务所需的知识，从而释放认知资源用于考虑未来。我们因此预测在发达市场经济体中的国际化经历能够使首席执行官具备知识，去处理公司在转型经济体中市场导向任务的挑战，从而释放认知资源来考虑更长期的投资视野。此外，当首席执行官面对与执行市场导向任务有关的高程度认知负担时，即高程度的市场改革范围、高强度的外国竞争、分析师覆盖以及高水平的机构持股情况下，他们以往的国际化经历将对公司的投资视野产生更强烈的影响。通过对2002 年至2019 年期间 204 位中国首席执行官的匹配样本进行分析，我们发现结果确实如此。

Keywords

CEO international experiencefirm investment horizonmarket-oriented adaptationmarket-oriented transitionmyopia首席执行官的国际经验公司投资视野短视市场经济转型市场导向改革
Type
Article
Information
Management and Organization Review , Volume 20 , Issue 1 , February 2024 , pp. 111 - 138
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of International Association for Chinese Management Research

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