Expatriate and Local CEOS: The Role of General Skills

We estimate the impact of expatriate CEOs using a novel Hungarian dataset on foreign-acquired firms. By examining acquisitions where the CEO was replaced with an expatriate or local, we address selection into both acquisition and CEO hiring. Expatriate CEOs increase total factor productivity by 13\% and domestic sales by 47\%. Effects are much larger in nontradable sectors, suggesting expatriates perform better where knowledge of the parent company and export markets is less relevant. We attribute this to expatriates possessing superior general management skills. Our findings shed light on how expatriate managers create value in foreign subsidiaries, particularly through their general managerial abilities rather than firm-specific or international market knowledge.