Corporate governance, managers' independence, exporting and performance of firms in transition economies

Igor Filatotchev, Natalia Isachenkova, Tomasz Mickiewicz

Research output: Preprint or Working paperWorking paper

Abstract

Using data on 157 large companies in Poland and Hungary this paper employs Bayesian structural equation modeling to examine interrelationships between corporate governance, managers' independence from owners in terms of strategic decision-making, exporting and performance. It is found that managers' independence is positively associated with firms' financial performance and exporting. In turn, the extent of managers' independence is contingent on the firm's corporate governance parameters: it is negatively associated with ownership concentration, but positively associated with the percentage of foreign directors on the firm's board. We interpret these results as an indication that (i) risk averse, concentrated owners tend to constrain managerial autonomy at the cost of the firm's internationalization and performance, (ii) board participation of foreign stakeholders, on the other hand, enhances the firm's export orientation and performance by encouraging executives' decision-making autonomy.
Original languageEnglish
Place of PublicationLondon (UK)
PublisherUniversity College London
Number of pages25
Publication statusPublished - Jan 2006

Publication series

NameEconomics working paper
PublisherUCL SSEES : Centre for comparative economics
No.62

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