Can Executives with Overseas Experience Effectively Improve the Quality of Internal Control in Companies
-- Empirical evidence from Shanghai and Shenzhen A-share listed companies
DOI:
https://doi.org/10.54097/hbem.v9i.9073Keywords:
Executive Overseas Experience; Internal Control; Financing Constraints; Digitalization.Abstract
The report of the 20th Party Congress emphasizes the importance of "attracting talents" and the importance of introducing high-quality talents. The relationship between returnee executives, as the key target of talent introduction, and the significance of internal control in enterprises has been little studied in the literature, and the relationship between the two needs to be further explored as internal control has reached a critical stage in China. This paper selects data of A-share listed companies in Shanghai and Shenzhen from 2011-2021, and explains the relationship between overseas experience of executives and the quality of internal control of enterprises using theories such as branding theory and principal-agent theory, and finds that: overseas experience of executives is significantly and positively related to the quality of internal control of enterprises, and the quality of internal control of enterprises can be improved through two paths: "accelerating the digital transformation of enterprises and suppressing financing constraints". The study found that the overseas experience of executives is significantly and positively related to the quality of internal control, and the quality of internal control can be improved through two paths: "accelerating the digital transformation of enterprises and curbing financing constraints. Further study finds that the effect of returnee executives on internal control quality is more pronounced in state-owned, highly competitive and larger enterprises. This paper enriches the literature on returnee executives and internal control, and inspires companies to pay attention to the overseas experience of executives in order to improve the quality of internal control and respond to the national strategy of "strengthening the country with talents".
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