Corporate Governance, Managers’ Independence, Exporting andPerformance of Firms in Transition Economies

Using data on 157 large companies in Poland and Hungary this paper employs Bayesianstructural equation modeling to examine interrelationships between corporategovernance, managers’ independence from owners in terms of strategic decision-making,exporting and performance. It is found that managers’ independence is positivelyassociated with firms’ financial performance and exporting. In turn, the extent ofmanagers’ independence is contingent on the firm’s corporate governance parameters: itis negatively associated with ownership concentration, but positively associated with thepercentage of foreign directors on the firm’s board. We interpret these results as anindication that (i) risk averse, concentrated owners tend to constrain managerialautonomy at the cost of the firm’s internationalization and performance, (ii) boardparticipation of foreign stakeholders, on the other hand, enhances the firm’s exportorientation and performance by encouraging executives’ decision-making autonomy....