CEO aging and the MNE internationalization portfolio

Considering rapid global aging, we examine how aging CEOs adjust the internationalization portfolios of multinational enterprises (MNEs). We employ cognitive aging theory, which distinguishes between fluid and crystallized intelligence, and analyze panel data from 364 MNEs in Japan, the country with the world’s oldest population. We find two adaptive mechanisms whereby cognitive decline may lead aging MNE CEOs to selectively adjust the internationalization portfolio in a way that reduces the cognitive demands of managing culturally distant host countries. Concurrently, they may be more likely to engage with a portfolio involving host countries with weak institutions, which require experience and intuition—traits that tend to grow with age. These findings challenge the unidimensional conceptualization of CEO aging prevalent in international business research, provide a more nuanced theoretical account of MNE CEO aging, and underscore the managerial aspect of internationalization.