A review of 270 studies links business leaders’ international experience with stronger company performance, innovation and overseas expansion. However, the researchers find that its value depends on what leaders learned, where they learned it and how their companies use that knowledge.
The University of Bath publicised the research on October 7. The Journal of Management paper, first published online on July 27, examines chief executives, founders, senior management teams and boards of directors.
Its authors are Fei Qin of Bath, Klaus E. Meyer of Ivey Business School and Sabina Tasheva Nielsen of the University of Sydney and Copenhagen Business School.
For companies recruiting executives or preparing to enter foreign markets, the review raises a practical question: which international experience matches the decisions the business needs to make?
What counts as international experience?
The researchers describe international experience as exposure gained by interacting in countries other than the one where an organization is based. It can include overseas work, education and formative years spent abroad.
Those experiences are not interchangeable. Studying abroad, managing a foreign subsidiary and working across several markets may develop different knowledge and relationships.
The review identifies four dimensions worth examining: length, breadth, variety and distance. These concern how much experience someone has, its extent across settings, the differences between those experiences and how far the environments differ from the organization’s home context.
Cultural and institutional distance includes differences in expectations and the rules under which businesses operate. It is not simply the number of miles traveled.
“International experience is much more than simply spending time abroad,” Qin said in the university’s announcement.
Knowledge, contacts and different ways of thinking
The paper brings together three main explanations for how international experience might affect a business.
Human capital means the knowledge and skills a leader develops. Social capital refers to relationships and networks. The third concerns cognition and values: how someone interprets information, assesses opportunities and makes decisions.
These resources can be relevant to choosing a foreign market, finding partners or evaluating an acquisition. The review discusses studies linking country-specific executive experience with acquisitions in that country and better post-acquisition performance.
Other research connects international experience with innovation spending and the returns generated by that investment. The reviewed literature also covers product development, business models and environmental initiatives.
The possible benefits therefore extend beyond multinational companies. A smaller business operating mainly at home might use knowledge acquired abroad to reconsider a product or working method.
However, the review identifies mechanisms proposed across the literature, rather than proving that each operates in every company. The authors note that many studies discuss these explanations without examining the intervening processes directly.
The wider team affects the outcome
An internationally experienced chief executive still works with other people. The review considers whether experience is concentrated in one leader, shared across a team or distributed among executives with different backgrounds.
Shared experience can provide common reference points. Different experience can broaden the information available and challenge assumptions. It can also complicate coordination when people interpret the same problem differently.
Our earlier coverage of leadership expectations across countries explores a related issue: practices that work in one setting may need adjustment elsewhere.
A company’s resources and decision processes also matter. Recognizing an opportunity does not establish that the organization can finance it, implement it or adapt when circumstances change.
Recruit for relevant experience
This is an integrative review of existing research, not a new experiment assigning executives to overseas roles. The studies use different definitions, samples and performance measures. Their relationships should not be read as a guaranteed causal improvement in profit from hiring someone who has lived abroad.
Nor does the paper supply a universal number of years abroad that makes a candidate suitable.
Qin recommends looking beyond whether a leader has international experience to its nature and the conditions that allow the organization to use it effectively.
For a hiring committee, that means examining the responsibilities a candidate held, the markets they understand and how that experience complements the existing team. A record of overseas assignments is useful evidence to investigate. It still needs to connect to the work the company wants done.
