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

See all articles by Abed Al-Nasser Abdallah

Abed Al-Nasser Abdallah

American University of Sharjah

Ahmad Ismail

American University of Beirut

Date Written: August 19, 2016

Abstract

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

Abdallah, Abed Al-Nasser and Ismail, Ahmad, Corporate Governance Practices, Ownership Structure, and Corporate Performance in the GCC Countries (August 19, 2016). Journal of International Financial Markets, Institutions & Money, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2826706

Abed Al-Nasser Abdallah

American University of Sharjah ( email )

United Arab Emirates
+971 6 515 2594 (Phone)

Ahmad Ismail (Contact Author)

American University of Beirut ( email )

Bliss Street
Olayan School of Business
Beirut, POB 11236
Lebanon

HOME PAGE: http://www.aub.edu.lb/osb/publicprofile/Pages/profile.aspx?memberID=ai05

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