Abstract
Exporting is a central growth strategy for most firms and managers with international experience are instrumental for export decisions. We suggest that such managers can be hired from Multinational Corporations (MNCs). We integrate theory from strategic human capital research into models explaining export decisions. We theorize that hiring managers from MNCs increases the odds of domestic firms to start exporting and this effect depends on the similarities between hiring firms and MNCs. We hypothesize that young firms will benefit comparatively less from hiring MNC managers. In contrast, firms with internationally diverse workforces and with high degrees of hierarchical specialization will benefit the most from hiring MNC managers. We test and support these hypotheses for 474,926 domestic firms in Sweden, which we observe between 2007 and 2015.
Highlights
Exporting is a fundamental growth strategy for many firms [1,2,3]
We focus on a particular hiring strategy of domestic firms: targeting managers who work for firms in which international experiences are typical, i.e. Multinational Corporations (MNCs)
We reason that MNCs provide an organizational context in which employees develop human capital that can facilitate export decisions when they are hired by domestic firms
Summary
Exporting is a fundamental growth strategy for many firms [1,2,3]. One key to having competitive products and processes for export markets originates from domestic firms’ endowment with internationally experienced managers [4,5,6]. We focus on a particular hiring strategy of domestic firms: targeting managers who work for firms in which international experiences are typical, i.e. Multinational Corporations (MNCs). Firms prepare for exporting by improving technologies [18, 19] for better process and product quality [20, 21] including the development of product innovations [22,23,24,25] We theorize that the strength of the effect on the likelihood to start exporting depends on whether the hiring domestic firm shares organizational similarities with MNCs because of boundaries to effective human capital transfer across organization contexts [13]. Future studies can build on this theory and explore other specificities of MNCs as work places, which make it hard to hire from them
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