Do Management Innovations of Indigenous Firms Benefit from Managerial Spillovers from Multinational Enterprises?

Abstract

Integrating research on foreign direct investment spillover and management innovation literature, this study develops and tests a spillover–management innovation–performance process model. The model posits that managerial spillovers, defined as the movement of managers from multinational enterprises to domestic firms, are indirectly related to the latter’s performance through management innovation, which serves as a conversion platform internalizing acquired knowledge for performance attainment. Moreover, we propose that the density of foreign direct investment and indigenous firms’ absorptive capacity moderate the spillover–innovation and innovation–performance relationships, respectively. Our findings support these propositions.