Returnee directors in Korean firms: does their presence influence corporate outcomes and what kinds of firms have more of them?

Abstract

More and more foreign students study overseas in economically and academically advanced countries such as the United States before returning to their home countries to pursue academic or management careers. This paper focuses on returnee directors working for major Korean corporations. Based on resource based view, I suspect that the recruitment and promotion of returnee directors are related to firms’ strategic focus such as export orientation and R&D intensity. Based on signaling effect and legitimacy literatures, I also propose that the presence of high-level returnee managers is related to foreign equity ownership. This paper also examined whether the presence of returnee directors is the cause or the effect of corporate change in terms of export orientation, R&D intensity, and foreign ownership. In the first part of this study, I found partial support for the hypotheses examining the influences returnees have on corporate performance and investment metrics except for the one relating to export-orientation. In the second part of the study, I examined whether certain firm characteristics lead to higher proportion of returnee directors and found partial support as well. This paper extends the fledging field of returnee executives and board of directors while following the tradition of Top Management Team research.