Your potential knows no bounds: Do local CEOs influence firms' overseas R&D activities?

CEOs significantly affect firms' strategic choices; however, little is known about whether and how local CEOs influence firms' overseas research and development (R&D) decisions. By synthesising upper echelons theory and place attachment theory, we explore the intrinsic mechanisms and situational boundaries through which local CEOs shape firms' overseas R&D. We posit that local CEOs have a weaker global mindset, which ultimately inhibits firms' overseas R&D activities, and that the negative impact is attenuated when (1) CEOs have more overseas experience, (2) firms are more internationalised, or (3) regions have more international openness. The results from a large dataset of listed Chinese companies spanning 2005 to 2022 support these predictions. This study provides novel theoretical and empirical evidence to expand the current understanding of the microfoundations of firms' overseas R&D decisions. Moreover, the findings have important implications for firms in better integrating innovation resources on a global scale to increase competitiveness.