Drivers of Korean Export Behavior: The Influence of the Korean Governance Structure and Outside Directors

Determinants of internationalization through exporting have been frequently examined in the Korean context due to its export-driven economy. Previous studies have focused on firm- or managerial- level analysis. The role of the peculiar governance structure of Korean firms, which includes family and Chaebol ownership, has seldom been examined. Further clarification of the influence of this governance structure on exports is required. In addition, few researchers have attempted to examine whether outside directors have adequate knowledge and information to make meaningful contributions to exportation. Therefore, this paper extends the literature on export behavior of Korean firms by highlighting their governance structure and discussing the managerial experience of outside directors. The key variables driving Korean exports were determined using data from 453 Korean manufacturing firms listed in the Korean Stock Exchange from 2005 to 2008. The results showed that the international experience of top managers and the distinctive Korean Chaebol governance structure positively affected internationalization through exporting, while family ownership was negatively associated with exportation. The influence of outside directors on export behavior was insignificant, unlike in more developed economies. Thus, outside directors have limited influence on managing Korean exporting enterprises. The business implications of the findings of this study are also discussed.