Using a novel dataset based on exhaustive administrative data from Hungary on firms and their managers for 1980-2017, we study how the impact of foreign ownership on firm performance can be explained by the presence of an expatriate Chief Executive Officer (CEO). We employ difference-in-differences techniques to compare foreign acquisitions that do not change the CEO, replace the CEO with a domestic individual, and replace the CEO with an expatriate. We find that CEOs chosen by the foreign owners increase the scale of production and labor productivity by 6.5 percent. Expatriate CEOs have an additional scale effect of 10 percent and productivity effect of 6.5 percent. The reasons for this increase are not changes in inputs as neither labor nor capital increases, but newly hired CEOs engage actively in exporting which increases by 9 percent for foreign-hired CEOs and by an additional 13 percent for expatriates.
