The impact of board characteristics on the internationalization of business group affiliates

Abstract

This study investigates the impact of board member characteristics on the internationalization performance of firms affiliated with family-owned and controlled business groups. The resourcebased view of the firm establishes the theoretical framework of the study. As boards of directors establish a source of human capital for firms, board member characteristics are expected to influence firms' internationalization performance through their impact on directors' ability to fulfill their roles of service and resource acquisition. The publicly listed affiliates of six business groups establish the sample of the study. Findings reveal that firms which have older and more educated boards with greater foreign country exposure and family representation outperform others in one of the measures of internationalization performance, namely the existence of outward foreign direct investment (FDI). However, board member characteristics do not seem to influence a firm's export intensity or geographical diversification.