The key to the strategy of reinvigorating China through human resource development is to build a team of high-quality talents who can stand on the forefront of the world and who is pioneering and innovative. Overseas experience is often regarded as a sign of a good educational background or professional knowledge and skills. The motivation of enterprises to employ executives with overseas background deserves our attention. The existing literature has explored the motivation of Chinese local enterprises to hire overseas background executives from the impact of overseas background executives on corporate performance, corporate governance, business network, overseas market and innovation performance, but the conclusions are not completely unified. These motivations are based on internal factors, without considering the impact of regional factors.
Peer effect is considered to be one of the most important determinants of corporate behavior. More and more enterprises interact with other enterprises in the same industry or in the same region. Peer effect is found in capital structure, corporate social responsibility performance and corporate mergers and acquisitions. However, little literature has studied the regional peer effect of employing overseas background executives in Chinese enterprises. This paper uses A-share listed companies from 2008 to 2017 as research samples to examine the existence and formation mechanism of the regional peer effect of employing overseas background executives in listed companies, in order to expand the research on influencing factors of listed companies’ employment of overseas background executives. The result shows that: (1) There is regional peer effect in the employment of overseas background executives by listed companies. (2) The behavior characteristics of the demonstrator and the relationship between the observer and the demonstrator are the important formation mechanism of regional peer effect. That means, in the same region, the level of international business and innovation capabilities of companies employing overseas background executives can affect companies’ decision of employing overseas background executives; the companies whose “top leaders” have similar ages or similar salary, and the companies having similar property rights, have greater consistency in employing overseas background executives.
This study attempts to make contributions in the following areas: First, it enriches the research of peer effect. This paper not only examines the existence of regional peer effect, but also studies its formation mechanism. Second, it expands the research on the influencing factors of employing executives with overseas background. Third, from a practical point of view, it reveals the influence of geographic group factors on companies’ talent recruitment. This study provides a reference for companies’ executive employment decisions and local governments’ talent introduction policies, so as to implement the strategy of “gathering talents from all over the world and using them to strengthen the country”.