Challenges in internationalization of R&D teams: Impact of foreign technocrats in top management teams on firm innovation

Abstract

This study explores two reasons for why and when firm innovation may not benefit from the presence of foreign technocrats in top management teams, who represent a ‘minority-in- minority’ status due to their membership of two minority sub-groups (foreigners and technology experts). First, foreign technocrats may face greater social barriers to exert their human capital because their minority-in-minority status brings about twice as much pressure from the majority (the double jeopardy hypothesis). Second, the similarity resulting from the overlap of the two executive groups may render their sub-group peers apprehensive about a loss of self-identity, thus leading to horizontal hostility (the narcissism of minor difference theory). Using a study of 1635 Chinese manufacturing firms to compare the joint effects of similar sub-group peers and CEOs, we find that the overlap of two groups is more likely to play a positive role when these two groups are more heterogeneous.