Beating the Post-IPO innovation slump: managerial overseas experience in China

Purpose Drawing upon upper echelons theory (UET), this study aims to investigate whether managerial overseas experience within top management teams (TMTs) helps firms beat the post-IPO innovation slump – a paradoxical decline in breakthrough innovation – in Chinese listed manufacturing firms. Design/methodology/approach Using a panel dataset of 1,287 Chinese A-share listed manufacturing firms from 2010 to 2019, this study employs a fixed-effects model as its primary analytical approach. To address potential endogeneity and ensure the robustness of the findings, the analysis is supplemented by two-stage least squares (2SLS) with an instrumental variable, alternative operationalizations of key variables, propensity score matching and Heckman’s two-step selection model. Findings The results demonstrate that overseas managerial experience significantly beats the post-IPO innovation slump, with foreign educational backgrounds being particularly pivotal. Moreover, the positive effect of managerial overseas experience is weakened by certain corporate governance mechanisms, particularly in firms with higher levels of equity incentives and equity balance. Subgroup analyses further reveal important boundary conditions: the positive effect is more pronounced in firms without a strong pre-IPO innovation imprint, while preliminary evidence suggests that such experience may exert an even stronger influence in state-owned enterprises. Originality/value This study extends the scope of UET’s application to the critical post-IPO phase within an emerging market context, identifying managerial overseas experience as a key driver of innovation resilience. By revealing how corporate governance structures constrain the returns to such human capital, the study enriches UET’s contingency perspective. It offers managerial insights on the critical alignment of TMT composition with internal governance design to sustain innovation in listed firms, particularly within emerging market economies.