Foreign experience and corporate innovation in China

In this thesis, we examine whether board of directors and senior executives with foreign experience affect a firm's innovation performance, which determines the firm's long term competitiveness, by utilising the data on foreign experience of directors and senior executives of all A-share listed companies in China from 1990 to 2010. We find that directors and senior executives with foreign experience increase innovative efficiency and result in more innovation output. It appears that the effect is more pronounced for senior-level overseas returnees who accumulated their foreign experience from countries with a higher standard of corporate governance, management practice and intellectual property rights protection, relative to their counterparts. Further, overseas returnees with commerce related degrees demonstrate a better performance in a firm's innovation output than overseas returnees with non-commerce related degrees. Our study documents that the foreign background of senior level returnees is able to increase the human capital of the firm that benefits the long-term firm's value adding by boosting the firm's innovation output.