Women's representation in top management teams of emerging markets' multinationals in developed countries: A legitimacy perspective

Abstract

Numerous studies have documented the existence of legitimacy challenges that emerging markets multinational enterprises (EMNEs) face in foreign markets due to their national origin. However, there is limited understanding of the EMNEs' strategic responses to offset these country-of-origin related disadvantages. In this study, we conceptualize gender diversity management (GDM) as a strategic response of EMNEs to mitigate the legitimacy challenges in developed countries. Specifically, we argue that emerging markets firms increase women's representation in top management teams to overcome the liability of origin. We use legitimacy perspective to examine the effect of pervasiveness of institutional voids in emerging markets on women's representation in top management teams of EMNEs. Based on subsidiary-level panel data of EMNEs from 20 emerging markets operating in developed countries from 2010 to 2019, our results show strong and robust evidence indicating that the pervasiveness of institutional voids at home is positively related to women's representation in top management teams of emerging markets firms. Additional analyses demonstrate that duration in the foreign market, market-seeking intent, and state ownership further magnify this effect. These findings, besides significantly adding to the international human resource management literature, have managerial implications.