The Impact of Foreign Directors and Foreign Ownership on Financial Performance

Abstract

The purpose of this study is to analyze the impact of foreign directors and foreign ownership on financial performances of companies traded in Borsa Istanbul (BIST). The study made use of data of 136 firms continuously active in BIST manufacturing industry between 2002 and 2012. Accounting-based and market-based performance indicators have been taken into account as performance criteria. Robust estimator which was developed by Beck-Katz (1995) was preferred for the study along with Stata 13.0 software. Results of the analyses suggested that foreign directors and foreign ownership, had impact on market value of companies. The findings of the study are parallel with the agency theory and resource dependence theory.