Internationalization labels of executives and corporate innovation—Form over substance?

Amid fierce competition for innovation due to globalization, internationalized executives are viewed as crucial links that connect global innovation resources. This research examines the impact of internationalized executives on corporate innovation performance and the underlying mechanisms. Using difference-in-differences and instrumental variable approaches, this study analyzes listed Chinese A-share listed firms from 2013 to 2023. Findings indicate that internationalized executives substantially enhance innovation efficiency primarily by optimizing resource allocation, i.e., shifting resources from noncore activities to innovative practices. Ownership structure and equity concentration significantly moderate this relationship. Internationalized executives in family businesses and high equity concentration firms merely serve as “window dressing” and are not involved in core decision-making, weakening their impact in driving innovation. The research identifies dynamic characteristics of internationalized executives, which gradually manifest and stabilize after an initial “honeymoon period.” Different types of internationalized executives exert varying influences. “Returnees,” who combine international perspectives with local roots, are most impactful, whereas “parachuted” executives, lacking local networks, are less impactful. This study extends the cross-application of upper echelons and institutional theories and provides empirical evidence and guidance for firms' precision talent recruitment.