Title: Global Palette: The Impact of Immigrant Talent on Multinational Product Strategy

Abstract:

We examine how human capital at an MNC’s headquarters affects its foreign product expansion choices. We theorize that immigrant workers hired at HQ are channels of country-specific knowledge and connections that facilitate three types of product-related decisions in their home country markets: launching new products, updating existing products, and adapting products to local conditions. Drawing on two remarkably fine-grained datasets, we examine 74,906 product launches by 340 US-based multinationals in the consumer packaged goods industry in 83 foreign markets during 2009-2019, matched to 7,876 skilled immigrant hires (on H-1B visas) by these firms over the same time period. The more immigrants from a given country a firm hires in the US, the more its subsequent products in that country exhibit locally-specific features. Hiring immigrants also leads to more frequent updates of preexisting products, especially in culturally distant markets relative to the US. Immigrants also help firms launch more new products in geographically distant countries after they are hired. These associations are stronger for more culturally-specific products (i.e., food and beverages vs. household and personal care) and hold only when immigrants occupy product-related roles (e.g., R&D, marketing, management) but not when they have non-product-related roles (e.g. accounting). Our study provides granular insights on the role of human capital across critical phases of global product strategy: new product development, local adaptation capability, and ongoing product management.

Bio:

Exequiel (Zeke) Hernandez is the Max and Bernice Garchik Family Presidential Associate Professor at Wharton. His research focuses on two areas: 1. analysing the impact of immigration on firm strategies and macroeconomic outcomes; and 2. examining the role of corporate strategies such as alliances, acquisitions, and divestitures to enhance their innovation and performance. His papers have been published in leading journals such as Administrative Science Quarterly, Management Science, Organization Science, Strategic Management Journal, and Academy of Management Journal. In addition, he has won numerous awards for individual research achievements (i.e., Emerging Scholar Award by the the Strategic Management Society, and the Academy of Management via the STR and IM Divisions), teaching achievements (i.e., Poets & Quants’ Best 40 Under 40 professor) and Best Paper awards by various professional organizations (i.e., AIB, SMS, and AOM).