The accentuated CEO career horizon problem: evidence from international acquisitions

E. MATTA, P. Beamish

Strategic Management Journal

July 2008, vol. 29, n°7, pp.683-700

Departments: Management & Human Resources

We develop a conceptual model of 'accentuated CEO career horizon problem' in the context of firm internationalization. We investigate the effect of a CEO's career horizon on choices of foreign market entry and how this effect is accentuated by the level of options and equity holdings of the CEO. Using a sample of 293 U.S. firms over five years-period (1995-1999), we find that a CEO's career horizon is positively associated with full-control entry modes. We also find evidence that a CEO's option holdings increase the likelihood of entry through a wholly-owned subsidiary, whereas equity holdings reduce it. Testing the accentuated career horizon problem, we observe that higher equity holdings mitigate the career horizon concerns of CEOs whereas higher option holdings accentuate them