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Expatriate Managers: Effects on Firm Performance

Author

Listed:
  • Miklós Koren
  • Álmos Telegdy

Abstract

Using a novel Hungarian dataset on firms and their Chief Executive Officers (CEOs), we estimate the impact of hiring expatriate CEOs. By examining foreign acquisitions where the new owner replaces the incumbent CEO with an expatriate or a local CEO, we address the selection into both acquisition and CEO hiring. Firms led by expatriate CEOs show 13 percent total factor productivity growth, 95 per-cent sales growth, and increase both exports and domestic sales. Hiring expatriate CEOs enhances firm performance in both international and domestic markets. Our findings suggest that expatriates have superior general management skills.

Suggested Citation

  • Miklós Koren & Álmos Telegdy, 2024. "Expatriate Managers: Effects on Firm Performance," CEU Working Papers 2024_1, Department of Economics, Central European University.
    • Handle: RePEc:ceu:econwp:2024_1
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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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