CEO Power and Internationalization Speed of Chinese Firms——The Mediating Effect of TMT Risk Attention

Abstract

Abstract: High risks are hidden behind the "accelerated" and "leap-style" internationalization process of Chinese enterprises. CEO power plays an important role in the internationalization strategy, yet few studies discussed its internal mechanisms of how CEO power influences the internationalization strategy through changing TMT cognition. Based on the classic paradigm of "organizational situation-attention allocation-decision-making", taking the internationalization speed of Chinese listed companies as the research object, this study examines the TMT international risk attention as a mediating mechanism linking CEO power to internationalization speed. The results show that CEOs with high power obtain benefits during their tenure by increasing investment commonly. Meanwhile, power spurs behavior approach systems, making CEOs pursue the benefits of rapid internationalization and ingore risks. CEO power becomes an important organizational context for TMT decisions and affects their attentions by influencing organizational activities, process, and communications. The optimism of CEOs with higher power will reduce TMT's international risk attention. The speed of internationalization increases when TMT pays less attention to international risk factors.

Key words: CEO power, international risk attention, internationalization speed

Fang Hong, Wang Yimin, Sun Chen. CEO Power and Internationalization Speed of Chinese Firms——The Mediating Effect of TMT Risk Attention[J]. Management Review, 2021, 33(9): 260-273.

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