Internationalisation and Corporate Governance: Australian Evidence

Abstract

This study investigates the interdependencies between a firm's degree of internationalisation and the corporate governance structure adopted. It builds on the concept of bi-directional causality between corporate governance and the degree of internationalisation. That is, we propose that while a firm's degree of internationalisation may affect the governance mechanisms in place, robust governance structures may aid the firm's move toward internationalisation. This proposition is, however, not supported based on a sample of 61 Australian firms. Tests of unidirectional causality show that the degree of internationalisation has a significant effect on the proportion of independent non-executive directors with international experience.