Staff localization strategy and host country nationals’ turnover intention

Abstract

Based on signaling theory, this study demonstrates the use of a multilevel framework to examine the effects of two alternative staff localization strategies (embedding and excavating localization) on the turnover intention of host country nationals (HCNs) as well as the mediating roles of perceived career opportunity (PCO) and cynicism. We collected multisource data from 476 HCNs working for 19 foreign firms in China. Data were analyzed using the multilevel structural equation model (MSEM). We find that the embedding localization strategy has a stronger effect on HCNs’ turnover intention as compared to the excavating localization strategy. While both PCO and cynicism significantly mediate the relationships between embedding localization and turnover intention, only PCO mediates the relationship between excavating localization and turnover intention. The implications of our study are discussed with regard to the key findings.