Influence of Outside Directors on the Export Intensity of Emerging Market Firms during Times of Crisis

Purpose - Based on agency theory, this study investigates how outside director appointment influences an emerging market firm’s export activities by reducing agency cost to enhance its competitiveness during crisis situations. In addition, integrating with resource dependence theory, we further examine how resources from a firm’s internal and external stakeholders weaken this relationship. Design/Methodology - To empirically test the influence of outside director on firms’ export intensity in the context of a crisis, we revisit the Asian Financial Crisis. We collect demographic and financial data from 373 listed firms between 1998 and 2000, establishing panel data. We test our hypotheses using the generalized least squares method, and we employ two-stage least squares estimation to address endogeneity issues. Findings - Our results indicate that outside director ratio positively affects firm export intensity during crisis periods in an emerging market. However, this positive relationship is moderated by the foreign educational experience of board members, as well as by foreign ownership, which reduce the strength of this effect. Originality/Value - This study makes a significant contribution to the international business and corporate governance literature. To address the inconclusive findings regarding the influence of outside director on a firm’s export intensity, we underscore the importance of contextualizing these investigations within crisis periods. We also highlight that the monitoring by outside directors of CEOs’ export decisions is heavily contingent on the extent of resources a firm secures from internal and external stakeholders.