An Empirical Study Of The Impact Of Top Management Team Heterogeneity On Foreign Market Entry Mode Of Chinese Companies

The foreign market entry mode of emerging market companies has attracted increasingly more attention.Based on the sample of 312 outward foreign direct investment events of 249 Chinese listed companies that have invested in the belt-road countries for the period 2013-2018,drawing on the upper echelons theory,organizational learning perspective and institutional theory,by using logit regression analysis method,this study examines the impact of top management team heterogeneity in functional background,education level and tenure on the choice of market entry mode of Chinese multinational companies,and examines the moderating effects of top management team international experience and governance quality of host country on their relationship.Firstly,top management team functional background heterogeneity is associated with a greater propensity to choose greenfield investments over acquisitions.On the contrary,firms with top management teams characterized by higher educational or tenure heterogeneity are more likely to opt for acquisitions over greenfield investments.Secondly,more international experience has a positive moderating effect on the tendency of higher functional background heterogeneous top management team to establish greenfield subsidiaries,but has a negative moderating effect on the tendency of higher tenure heterogeneous top management team to establish acquisitions.Finally,greater governance quality of host country also has a negative moderating effect on the tendency of higher tenure heterogeneous top management team to establish acquisitions.The implications of this paper are as follows: Firstly,this paper empirically tests the effects of top management team functional background,educational and tenure heterogeneity on the foreign market entry mode choice,which enriches the literature of market establishment mode and the upper echelons theory.Secondly,by combining the international experience of the top management team and the governance quality of the host countries,this paper studies the moderating effects of the country level and the top management team level on the relationship between the top management team heterogeneity and the international entry mode,which enriches the situational factors of this relationship,and making this research more in line with the reality.This study also provides implications for managerial practices and helps Chinese enterprises go global successfully.