Corporate Governance Practices, Ownership Structure, and Corporate Performance in the GCC Countries
Journal of International Financial Markets, Institutions & Money, Forthcoming
50 Pages Posted: 21 Aug 2016
Date Written: August 19, 2016
This study is motivated by highly concentrated ownership, the relatively large government stake in listed firms in the GCC (Gulf Cooperative Council) region, and the rapid stock market development and developing investor protection environment. The results point to heterogeneity in governance quality across exchanges. For the first time, we find that the positive relationship between governance quality and firm performance is maintained and is stronger at low levels of concentrated ownership. More interestingly, we find that the relationship between governance and firm performance is an increasing function of dispersed ownership and that the value addition of good governance is not necessarily maintained at high levels of ownership concentration. Furthermore, such a relationship reaches its highest level when the government or local corporations are the firm’s major shareholders.
Keywords: Corporate Governance; performance; Ownership Structure; transparency; financial disclosure
JEL Classification: G30
Suggested Citation: Suggested Citation