Corporate governance and firm internationalisation: a study of australian-based multinational corporations

2017-03-01T03:52:39Z (GMT) by Anwar, G. M. Javed
The central premise of this thesis is that existing research in the fields of corporate governance and international business does not adequately address the implications of corporate governance for firm internationalisation. This research identifies that managerial opportunism and misalignment of interests with corporate owners are two vital yet interconnected elements that inevitably allow managers to misappropriate corporate resources and damage the objectives, process and outcome of firm internationalisation. Accordingly, this research investigates the efficacy of corporate governance in controlling value-destroying management behaviour. The finding that formal corporate governance is a significant predictor of firm internationalisation is a new contribution to corporate governance and international business research. This research contributes to the literature that agency theory, transaction costs theory and the resource-based view of the firm are complementary in explaining corporate governance, firm internationalisation and the relationship between them. It reveals that a combined governance arrangement of monitoring, incentivising and contractual safeguarding of management behaviour provides a balanced development for internationalisation by multinational corporations. In the contexts of the reliability of current data and lack of reliability in past cross-sectional and longitudinal research, this research has confirmed the reliability and validity of its findings, because it accounts for inter-temporal dynamics, intra-firm dynamics, inter-firm differences and the complexity of the behaviour of owners, managers and directors. Because of path-dependence and divergences in corporate governance and other systems, traditions and practices, even among Anglo-Saxon countries of similar standing, this research further warns of potential pitfalls that can arise from the blanket application of findings drawn from one national context to another. This research thus concludes that effective corporate governance is a superior complementary resource that generates resource heterogeneity and is an effective isolating mechanism in order to enable optimum commitment to firm internationalisation, and ultimately, optimum growth and differential rent. It argues that this link needs to be considered by academics, practitioners and policymakers when governance choices and internationalisation strategies are considered.