The Effects of Internationalization on CEO Compensation

Journal of International Business Studies, Vol. 36, No. 4, pp. 470-483, July 2005

IUI Working Paper No. 611

26 Pages Posted: 23 Aug 2004 Last revised: 26 Sep 2008

See all articles by Lars Oxelheim

Lars Oxelheim

Research Institute of Industrial Economics (IFN); University of Agder; Lund University

Trond Randøy

University of Agder - School of Management

Date Written: February 9, 2004

Abstract

This study examines the relation between the internationalization of firms and CEO compensation. Starting from a sample of Norwegian and Swedish listed firms, we analyze the effects of internationalization as manifest in the capital market (international cross-listing), the market for corporate control (foreign board membership), and the product and service market (export and foreign sales). We conclude that all three markets contribute positively to the compensation level of CEOs. We argue that part of the higher CEO compensation in internationally oriented firms - as compared to less internationalized firms within the same country - reflects a risk premium for reduction in job security.

Published with the revised title "The Anglo-American Financial Influence on CEO Compensation in Non-Anglo-American Firms".

Keywords: CEO compensation, internationalization, corporate governance, CEO tenure, cross-listing, foreign board membership

JEL Classification: G34, K12, M10, M12

Suggested Citation

Oxelheim, Lars and Randøy, Trond, The Effects of Internationalization on CEO Compensation (February 9, 2004). Journal of International Business Studies, Vol. 36, No. 4, pp. 470-483, July 2005, IUI Working Paper No. 611, Available at SSRN: https://ssrn.com/abstract=546504 or http://dx.doi.org/10.2139/ssrn.546504

Lars Oxelheim (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

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University of Agder ( email )

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Trond Randøy

University of Agder - School of Management ( email )

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