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

Filatotchev, I.; Isachenkova, N.; Mickiewicz, T.; (2006) Corporate governance, managers' independence, exporting and performance of firms in transition economies. (Economics Working Papers 62). Centre for the Study of Economic and Social Change in Europe, SSEES, UCL: London, UK. Green open access

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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.

Type: Working / discussion paper
Title: Corporate governance, managers' independence, exporting and performance of firms in transition economies
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.ssees.ucl.ac.uk/wp62sum.htm
Language: English
Additional information: Please see http://discovery.ucl.ac.uk/12996/ for a version published in the journal Emerging Markets Finance and Trade
Keywords: Corporate governance, strategic independence, exporting, performance
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES
URI: https://discovery.ucl.ac.uk/id/eprint/17500
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