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Ownership structure, strategic controls and export intensity of foreign-invested firms in transition economies

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Abstract

This paper examines the relationships between foreign ownership, managers' independence in decision-making and exporting of foreign-invested firms in five European Union accession countries. Using a unique, hand-collected data set of 434 foreign-invested firms in Poland, Hungary, Slovenia, Slovakia and Estonia, we show that foreign investors' ownership and control over strategic decisions are positively associated with export intensity, measured as the proportion of exports to total sales. The study also analyzes specific governance and control configurations in foreign-invested firms, showing that foreign equity and foreign control over business functions are complementary in terms of their effects on export intensity.

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Notes

  1. We use the following OECD classification according to NACE two- and three-digit codes: high-tech 242, 244, 30, 32, 333, 3530; medium-high-tech: 24 excl. 242, 29, 34, 352, 354, 359; medium-low-tech: 23, 25–28, 351; low-tech: 15–22, 36–37.

  2. The ANOVA test statistics show that there are significant differences between clusters and similarities within clusters with respect to all variables.

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Acknowledgements

This research was supported by an EU research grant ‘EU Integration and the Prospects for Catch-Up Development in CEECs – The Determinants of the Productivity Gap’ (contract no. HPSE-CT-2001-00065). We thank Keith Brouthers, Saul Estrin, Klaus Meyer, Mike Wright, the participants of the 2006 Academy of Management Annual Meeting (Atlanta, USA), David K. Tse (the Departmental Editor) and two anonymous reviewers for their helpful comments.

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Authors and Affiliations

  1. Sir John Cass Business School, City University, London, UK

    Igor Filatotchev

  2. Halle Institute for Economic Research, Halle (Saale), Germany

    Johannes Stephan & Björn Jindra

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  1. Igor Filatotchev
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  2. Johannes Stephan
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  3. Björn Jindra
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Correspondence to Igor Filatotchev.

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Accepted by Arie Y Lewin, Editor-in-Chief, 23 August 2007. This paper has been with the authors for two revisions.

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Filatotchev, I., Stephan, J. & Jindra, B. Ownership structure, strategic controls and export intensity of foreign-invested firms in transition economies. J Int Bus Stud 39, 1133–1148 (2008). https://doi.org/10.1057/palgrave.jibs.8400404

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