Our research integrates theoretical perspectives related to distributed leadership in geographically dispersed teams with empowering leadership theory to build a multilevel model of virtual collaboration and performance in dispersed teams. We test the model with procurement teams in a major multinational corporation. Our results show a significant cross‐level effect of empowering team leadership, such that under conditions of high empowering team leadership, a team member's virtual teamwork situational judgment (VT‐SJ) is positively and significantly associated with his or her virtual collaboration behaviors and also indirectly with his or her individual performance in the team. At the team level, our findings also suggest that the impact of empowering leadership on team members’ aggregate virtual collaboration, and indirectly on team performance, increases at higher levels of team dispersion. These findings shed important light on the role of team leadership in fostering effective collaboration and performance of geographically dispersed virtual teams.
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