Top Management Team Internationalization and Innovation: The Role of International R&D Collaboration

Abstract

While Top Management Team (TMT) internationalization is an increasingly observed phenomenon, we know little about the mechanisms through which TMT internationalization fosters firm performance. In this paper we argue that an international TMT, as indicated by the international work experience (IWE) or the international origin of its members, can enhance innovation performance by steering the firm towards (successful) international R&D collaborations. Analyzing a unique employer-employee dataset of match with innovation surveys (2012-2018), we find that international TMTs show a higher propensity to engage in international R&D collaborations, which in turn positively contributes towards firm innovation performance. We do not find a direct effect of TMT internationalization on innovation performance. Our findings highlight the importance of examining the complex mechanisms through which TMT configurations and the hiring of foreign material talent can have firm performance consequences.