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Going global? CEO political ideology and the choice between international alliances and international acquisitions

Author

Listed:
  • Jeffrey A. Chandler

    (University of North Texas)

  • Yeongsu (Anthony) Kim

    (Western Kentucky University)

  • Jacob A. Waddingham

    (Texas State University)

  • Aaron D. Hill

    (University of Florida)

Abstract

Drawing on upper echelons theory and political science research, we investigate how CEO political ideology influences a firm’s choice between international alliances and international acquisitions as an entry mode into foreign markets. Due to their ideological differences, we find that firms led by more liberal CEOs are more likely to use international alliances when entering a foreign market while firms led by more conservative CEOs are more likely to use international acquisitions as an entry mode choice. We also examine how these political preferences of CEOs can be mitigated by more vigilant boards. We find that the effect of CEO political ideology on the choice between international alliances and international acquisitions is mitigated by greater board independence and greater independent director shareholdings in the firm. However, contrary to our expectations, we find that separating the CEO and board chair positions has no effect on this relationship, suggesting that CEOs’ political preferences shape such choices regardless of whether CEOs are also the chair of the board. In general, our findings indicate the importance of CEO political values as a predictor of a firm’s approach to foreign market entry strategies.

Suggested Citation

  • Jeffrey A. Chandler & Yeongsu (Anthony) Kim & Jacob A. Waddingham & Aaron D. Hill, 2023. "Going global? CEO political ideology and the choice between international alliances and international acquisitions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1441-1470, October.
    • Handle: RePEc:pal:jintbs:v:54:y:2023:i:8:d:10.1057_s41267-023-00607-0
    DOI: 10.1057/s41267-023-00607-0
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