Knowledge that Transforms

Research Summary Scholars have found that female representation in strategic leadership is often positively associated with firm performance, though the underlying mechanisms remain unclear. Prior explanations emphasize top‐down effects, considering how female leaders shape strategic decision‐making or influence legitimacy. We propose a complementary, bottom‐up view: female top managers foster employee participation, which is positively associated with firm performance. Using a unique panel dataset from South Korea, we find that female representation in top management is linked to higher employee participation, which mediates its relationship with firm performance. The benefits of employee participation are especially pronounced in firms with innovation‐oriented or labor‐intensive strategies. By integrating micro‐level employee behaviors with macro‐level firm outcomes, our study shows how female strategic leaders contribute to firm performance through a top‐enabled, bottom‐up process. Managerial Summary Why do firms with more women in top management perform better? Our study suggests that one important pathway lies in how female executives may foster employee participation. Drawing on a unique panel dataset from South Korea, we find that organizations with more women in top management tend to have higher levels of employee participation in decision‐making, and that such participation is associated with stronger performance outcomes. This effect is especially evident in firms that depend on innovation or human capital, where employee input and commitment are particularly valuable. By highlighting how female strategic leaders help create conditions that elevate employee voice, our findings reveal a bottom‐up process through which strategic leadership diversity may support improved organizational performance.

Research Summary This study elucidates the previously underexplored structural heterogeneity inherent in multinational corporations' (MNCs) internal linkages by examining the concentration of cross‐border collaborations among inventors within host countries. Building on the boundary spanning literature, we develop a two‐stage framework identifying the knowledge distortion mechanism arising from this concentration: information overload in the cross‐country knowledge absorption stage and long transmission paths and knowledge hoarding in the within‐country diffusion stage. Both hinder local knowledge creation. We further propose that cross‐country and within‐country network structures serve as contingencies moderating this relationship. The negative effects of collaboration concentration are exacerbated by structural holes in cross‐country networks but attenuated by the reach and density of within‐country networks. Empirical results based on American pharmaceutical MNCs from 1980 to 2008 support our hypotheses. Managerial Summary Effectively structuring internal cross‐border R&D collaborations is crucial for MNCs seeking to enhance local innovation outcomes. Although many firms focus on increasing cross‐border linkages, this study highlights that overlooking how collaborations are distributed among inventors can obscure key drivers of innovation performance. This research shows that given the number of cross‐border linkages, their concentration in the hands of a few inventors within a host country hinders local knowledge creation. The negative effect is amplified when the host country spans many structural holes in the cross‐country network. A well‐structured within‐country network with high reach or high density can help mitigate the effect by facilitating knowledge diffusion. Our findings highlight the importance of considering the structural and geographic configuration of internal MNC networks in global R&D strategy.