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Top management characteristics and firm's international diversification activities: evidence from a developing nation

Amin Noordin, Bany Ariffin and McGowan, Carl B. and Tunde, Matemilola Bolaji and Shahnaz, Abd Salam (2014) Top management characteristics and firm's international diversification activities: evidence from a developing nation. Pertanika Journal of Social Sciences & Humanities, 22 (spec. Dec.). pp. 39-54. ISSN 0128-7702; ESSN: 2231-8534

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Abstract

Recent trend shows that foreign investment has increased rapidly, and raises a question as to whether managerial characteristics impact international diversification, as claimed by the Uppsala internationalisation process theory. This paper investigates the relationship between top management team's characteristics and firm's Outward Foreign Direct Investment, that is, international diversification. This study focuses on 83 of the top 100 largest Malaysian multinational firms. The entropy measure is used as the proxy for level of international diversification. Age, international experience, educational level and functional background are proxies reflecting the management's cognitive abilities and competencies. The findings showed that age and functional background have significant positive influence on the level of international diversification. In addition, the results also suggested there is a reasonable support for upper echelons theory and Uppsala internationalisation process theory.

Item Type:Article
Keyword:Entropy; International diversification; Upper echelons theory; Uppsala internationalisation process theory
Faculty or Institute:Faculty of Economics and Management
Publisher:Universiti Putra Malaysia Press
ID Code:38951
Deposited By: Nabilah Mustapa
Deposited On:27 Jan 2016 11:48
Last Modified:27 Jan 2016 11:48

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