Tulay Ilhan Nas and Ozan Kalaycioglu
This study aims to understand the antecedents of export performance at the firm level. Building on agency theory but taking into account emerging market settings and institutional…
Abstract
Purpose
This study aims to understand the antecedents of export performance at the firm level. Building on agency theory but taking into account emerging market settings and institutional differences, the authors investigate how the board composition determines the export competitiveness of the firms operating in an emerging country from the point of view of corporate governance mechanisms.
Design/methodology/approach
Using data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and chief executive officer (CEO) positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.
Findings
Using data from 221 exporting firms for four years (2007-2010), the authors find that there is a significantly positive relationship between board size and all measures of export performance, while a higher presence of outside directors on the board is a negatively associated with export performance, consistently with expectations. The separation of chairman of board of directors and CEO positions has significantly positive impact on export performance. On the other hand, the authors find no support for the position that inside director professional representation neither reduce nor increase all measures of export performance of firms. In other words, the convergence with Western practices and consistently with agency theory’s claims is evident for both board size and CEO duality. However, the effects of inside professional and outside directors are no consistent with agency theorists’ expectations.
Research limitations/implications
Export performance is one of the most widely researched areas within international marketing research but least reached topic of management. However, exporting continues to be an important mode of internationalization for multinational companies, especially operating an emerging economy. This study is one of the first studies on the impact of governance factors such as board structure on only export performance rather than overall (firm) performance in light of international management. In other words, the study of the determinants of exports in the context of an emerging economy is an important contribution to the literature, given that our understanding of how the board composition determines the export competitiveness from the point of view of firms operating in an emerging country such as Turkey. Moreover, this research investigates this relationship at objective export performance dimensions using primary data set from listed and non-listed export firms.
Practical implications
The current study offered in-depth information to multinational companies that aim to gain a competitive exporting advantage in Turkey. Further, the results of this study give managers an opportunity to see the reasons behind the success of the exporting firms from the point of view of corporate governance mechanism.
Originality/value
In this paper, the authors contribute to this recent stream of research providing evidence on the effects of governance mechanism on the export performance from the point of view of emerging countries. Building on agency theory but taking into account emerging market settings and institutional differences, and international management, the authors provide a new framework that models the linkages between board composition and export performance. This work helps us to gain a deeper understanding of how board dynamics contribute to the internalization of firms. Research in this area has been sparse, although some studies have linked governance with export intensity. In this effort, the authors differentiate from previous studies in several ways.
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Tülay Ilhan-Nas, Emrah Koparan and Tarhan Okan
The purpose of this study is to contribute to the understanding of the interrelationships between corporate social responsibility (CSR) isomorphism of headquarters (HQs) and their…
Abstract
Purpose
The purpose of this study is to contribute to the understanding of the interrelationships between corporate social responsibility (CSR) isomorphism of headquarters (HQs) and their subsidiaries as well as corporate social performance (CSP) and corporate financial performance (CFP) at the subsidiary level.
Design/methodology/approach
This study tested these relationships through canonical correlation analyses. The data used were drawn from corporate HQ and 63 subsidiaries, which were publicly listed on the Istanbul Stock Exchange in 2007. Both qualitative and quantitative techniques were used in the study.
Findings
The results generally indicated that the isomorphism between the CSR practices of the HQ and those of their subsidiaries could impact both the CSP, especially the product and employee dimensions, and the CFP. No relationship was found to exist between the CSP and CFP.
Originality/value
Despite extensive interest by scholars and practitioners in the subject area, relatively little is known about the management of CSR by the multinational enterprises (MNEs) (Meyer, 2004), as the literature does not systematically examine the effects that occur on employee performance following the diffusion of CSR among the MNEs subsidiaries. Extending earlier literature on CSR, by integrating the effect of the CFP, the present study focuses on the effects of isomorphism between the CSR practices of the MNEs and those of their subsidiaries on both CSP and CFP. Further, the study examined the interrelation of CSP and CFP from the perspective of international management. Given the increased interest in corporate governance matters at the international level, CSR plays a central and fundamentally important role in the corporate governance of the MNEs because of both globalization forces and the pressures exerted by stakeholders. In this context, this paper is one of the first to explore the transfer of CSR practices from the MNEs to their subsidiaries. The effect of CSR on performance is an important research question, especially for emerging markets (Ibrahim and Angelidis, 1995; Waddock and Graves, 1997; Ghazali, 2007; Johnson and Greening, 1999). Despite the importance of this issue, however, until recently, only a limited discussion has been evident in the literature on CSR in the international arena with particular reference given to the emerging economies. Studying the effects of the CSR isomorphism on the performance in Turkish context is justified in three ways. First, Turkey is the largest emerging economy in Eastern Europe, the Balkans and the Middle East (Tatoglu et al., 2003, p. 7). It presents the emerging nature of the market and the transitional characteristics of the institutional environment (Cavusgil et al., 2002). Second, the drivers for CSR in Turkey, such as the other emerging markets whose institutional characteristics and economic fundamentals is similar, are exogenous and institutional rather than endogenous factors (Ararat and Gocenoglu, 2006, p. 11). Excluding the philanthropic activities, the very first manifestations of CSR were observed in the business conduct of MNEs in Turkey (Ararat and Gocenoglu, 2006, p. 11). MNEs have a dominant and leader role in Turkey for CSR practices. Finally, the subsidiaries operating in Turkey are less likely to resist the transfer of the organizational policies and practices such as human resource management policies (Sayim, 2010, 2011) and organizational culture (Ilhan, 2008). In fact, they want to even transfer the policies and practices from MNEs (Sayim 2010, 2011; Ilhan, 2008). Therefore, Turkish context provides a good case to test the effects of the CSR isomorphism on the performance.