Taking Chances? The Effect of CEO Risk Propensity on Firms’ Risky Internationalization Decisions

Hamid Boustanifar*, Edward J. Zajac, Flladina Zilja

*Corresponding author for this work

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This study addresses the growing calls among international business and international entrepreneurship scholars for greater research attention to the effect of leaders’ characteristics on their firms’ risky internationalization choices. Focusing on the fundamental leader characteristic identified in the international entrepreneurship literature, i.e., risk propensity, we develop and test an original framework for analysis, which suggests that CEOs with greater risk propensity will tend to steer their firms towards greater degrees of internationalization and towards more risky venues/locations (countries at a greater cultural distance) and vehicles/entry modes (acquisitions versus alliances). We also more precisely assess our underlying assumption of agentic CEOs affecting firms’ internationalization decisions by positing and testing additional moderator relationships, in which we suggest that the effect of CEO risk propensity on the riskiness of firms’ internationalization choices will be (1) amplified when CEOs enjoy greater power, and (2) attenuated for firms with greater internationalization experience. Empirically, our analyses show significant and robust support for both our main effect and moderator hypotheses. Our study has implications for the burgeoning literature on the micro-foundations of internationalization, as well as the upper echelons and international entrepreneurship literatures.
Original languageEnglish
JournalJournal of International Business Studies
Issue number2
Pages (from-to)302-325
Number of pages24
Publication statusPublished - Mar 2022

Bibliographical note

Published online: 15 November 2021.


  • CEO risk propensity
  • CEO/board power
  • International experience
  • Internationalization
  • Cultural distance
  • Entry modes
  • Panel data regressions

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