The effect of CEO incentives on deviations from institutional norms in foreign market expansion decisions: Behavioral agency and cross-border acquisitions
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Benischke, MH; Martin, GP; Gomez-Mejia, LR; Ljubownikow, GDate
2020-09-01Source Title
Human Resource ManagementPublisher
WileyUniversity of Melbourne Author/s
Martin, GeoffAffiliation
Business AdministrationMetadata
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Journal ArticleCitations
Benischke, M. H., Martin, G. P., Gomez-Mejia, L. R. & Ljubownikow, G. (2020). The effect of CEO incentives on deviations from institutional norms in foreign market expansion decisions: Behavioral agency and cross-border acquisitions. Human Resource Management, 59 (5), pp.463-482. https://doi.org/10.1002/hrm.22006.Access Status
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https://repub.eur.nl/pub/124890/Repub_124890.pdfAbstract
CEO incentives have been the subject of great interest for human resource scholars. We explore the institutional context within which the CEO makes sense of their incentives. Our theory suggests that CEO equity incentives interact with institutional norms to influence foreign market entry choices. Specifically, we argue that CEOs will weigh the risk bearing created by equity incentives, along with the consequences of legitimacy loss, when deciding whether to deviate from institutional norms when internationalizing. In doing so, we advance human resource literature by demonstrating that CEO responses to incentives are influenced by institutional norms and that CEOs' decisions to deviate from institutional norms are shaped by their incentives. We find support for our framework in the analysis of the stake taken by acquirers in 4,184 cross‐border acquisitions.
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