An Empirical Investigation of Expatriate Utilization: Resource-Based, Agency, and Transaction Costs Perspectives

This paper develops a new integrative framework explaining and predicting multinational firms' international staffing decisions based on resource-based, agency, and transaction costs theories. In this framework, a firm considers (1) the relative values that expatriates / local managers can bring to the firm, and (2) the relative control that the firm is able to exercise over expatriates and local managers through managerial contracting, when making strategic international staffing decisions. Accordingly, we identify a set of target industry characteristics and multinational firm characteristics that are predicted to influence international staffing decisions, and we examine these decisions on a sample of 365 Japanese manufacturing subsidiaries in the United States.