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Chairperson and CEO foreignness and CG quality of emerging markets MNCs: Moderating role of international board interlocks

Geofry Areneke Orcid Logo, Tunyi Tunyi Abongeh

International Journal of Finance and Economics, Volume: 27, Issue: 3, Pages: 3071 - 3092

Swansea University Author: Tunyi Tunyi Abongeh

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DOI (Published version): 10.1002/ijfe.2313

Abstract

We examine whether foreign chief executive officers (FCEOs) and foreign independent board chairpersons (FIBCs) improve on the corporate governance (CG) practices of emerging market multinational corporations (EMMNCs) through governance spill over. We use hand-collected data for 80 listed Nigerian mu...

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Published in: International Journal of Finance and Economics
ISSN: 1076-9307 1099-1158
Published: Wiley 2022
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URI: https://cronfa.swan.ac.uk/Record/cronfa65110
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Abstract: We examine whether foreign chief executive officers (FCEOs) and foreign independent board chairpersons (FIBCs) improve on the corporate governance (CG) practices of emerging market multinational corporations (EMMNCs) through governance spill over. We use hand-collected data for 80 listed Nigerian multinational corporations for the period 2011–2016 (480 firm-years) and apply a three-stage least squares regression to address endogeneity issues. Our findings show international exposure of EMMNCs motivate appointment of FIBCs and FCEOs who positively affect their CG quality. In addition, international board interlocks positively moderate the likelihood of FCEOs to export and enhance EMMNCs' CG quality, but negatively moderate FIBCs impact on CG practices of EMMNCs. Finally, we develop a framework to show how EMMNCs' CG practices are exemplary to local firms in the home country who may mimic these governance practices. We contend the repeated game of governance spill-over and mimetic isomorphism drives the evolution of CG institutions and, potentially, will generate institutional change in CG practices in emerging markets.
Keywords: Board international interlocks, Corporate governance quality, Emerging market multinational corporations, Foreign CEO, Foreign independent board chairman, Governance isomorphism, Repeated game
College: Faculty of Humanities and Social Sciences
Issue: 3
Start Page: 3071
End Page: 3092

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