Unlocking the relationship between board of directors’ attributes and international diversification in Indian firms

Abstract

Purpose The study aims to investigate the relationship between certain key attributes of the board of directors as their international experience, tenure, age, independence and size and internationalization strategies of firms in an emerging economy. Design/methodology/approach The study uses random effects panel Tobit regression on a data set of 418 Indian companies spanning over a time frame of nine years from fiscal year (F.Y.) 2009–2010 to F.Y. 2017–2018. Findings Board members substantially associate with internationalization choices of emerging economy firms. Specifically, board members with extensive international experience, shorter tenure, higher age, greater independence and larger board size are associated with high level of internationalization in these firms. Research limitations/implications The study advocates that Indian companies should focus on recruiting board members with international experience, periodically refreshing their boards, valuing wisdom and experience, adhering to regulatory requirements of independent directors and increase the number of board members to expand internationally. By following this, Indian companies can successfully expand into international markets. Originality/value The study’s originality lies in its focus on the role of board members in the internationalization strategy of emerging economy firms, which remains an under-researched area.