Ownership Structure, Corporate Governance Reform and Firm Performance in Kuwait

23 Pages Posted: 13 Jul 2021

Date Written: July 12, 2021

Abstract

This paper examines the link between ownership structure and firm performance in Kuwaiti firms in the context of recent corporate governance reform. Panel data robust regressions of firm performance against ownership structure specify variously the former using the returns on assets and equity, the debt to equity ratio, leverage, and Tobin’s Q and the latter as family, government and local and foreign institutional ownership. We find family ownership has the most influence on firm performance followed by government ownership, but disproportionately to their actual shares of ownership. Importantly, corporate governance reform appears to have had little effect in moving to a first voluntary then compulsory corporate governance code and guidelines, suggesting many firms had either adopted good governance principles under market pressure or exited the industry in anticipation of the more stringent regulatory controls.

Keywords: Family ownership, government ownership, institutional shareholders, corporate governance, firm performance

JEL Classification: G30, G32

Suggested Citation

Alajmi, Abdullah and Worthington, Andrew C., Ownership Structure, Corporate Governance Reform and Firm Performance in Kuwait (July 12, 2021). Available at SSRN: https://ssrn.com/abstract=3884662 or http://dx.doi.org/10.2139/ssrn.3884662

Abdullah Alajmi

Griffith University ( email )

170 Kessels Road
Nathan, Queensland QLD 4111
Australia

Andrew C. Worthington (Contact Author)

Griffith University ( email )

170 Kessels Road
Nathan, Queensland 4111
Australia
+61 (0)7 3735 4273 (Phone)
+61 (0)7 3735 3719 (Fax)

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