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Corporate Governance, Managers’ Independence, Exporting And Performance Of Firms In Transition Economies

  • Igor Filatotchev


  • Natalia Isachenkova


  • Tomasz Mickiewicz


Using data on 157 large companies in Poland and Hungary this paper employs a 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 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) 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.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp805.

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Length: pages
Date of creation: 01 Nov 2005
Date of revision:
Handle: RePEc:wdi:papers:2005-805
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  1. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  2. Yadong Luo & Mike W Peng, 1999. "Learning to Compete in a Transition Economy: Experience, Environment, and Performance," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 269-295, June.
  3. Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
  4. Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "learning-by-exporting" important? Micro-dynamic evidence from Colombia, Mexico and Morocco," Finance and Economics Discussion Series 96-30, Board of Governors of the Federal Reserve System (U.S.).
  5. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," NBER Working Papers 5879, National Bureau of Economic Research, Inc.
  6. Djankov, Simeon & Murrell, Peter, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," CEPR Discussion Papers 3319, C.E.P.R. Discussion Papers.
  7. Otto Andersen, 1993. "On the Internationalization Process of Firms: A Critical Analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 24(2), pages 209-231, June.
  8. Finney, R. Zachary & Campbell, Noel D. & Powell, C. Michael, 2005. "Strategies and resources: Pathways to success?," Journal of Business Research, Elsevier, vol. 58(12), pages 1721-1729, December.
  9. Richard Scheines & Herbert Hoijtink & Anne Boomsma, 1999. "Bayesian estimation and testing of structural equation models," Psychometrika, Springer, vol. 64(1), pages 37-52, March.
  10. Randall Morck & Daniel Wolfenzon & Bernard Yeung, 2004. "Corporate Governance, Economic Entrenchment and Growth," NBER Working Papers 10692, National Bureau of Economic Research, Inc.
  11. Klaus Uhlenbruck & Klaus E. Meyer & Michael A. Hitt, 2003. "Organizational Transformation in Transition Economies: Resource-based and Organizational Learning Perspectives," Journal of Management Studies, Wiley Blackwell, vol. 40(2), pages 257-282, 03.
  12. FFF1Jitka NNN1Rychtarikova, 2004. "The case of the Czech Republic," Demographic Research Special Collections, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 2(5), pages 105-138, April.
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