The effect of ownership concentration on a firm's performance is an important issue in the literature of finance theory. This study seeks to examine the effect of ownership concentration on firm financial performance in Saudi Arabia, using pooled cross-sectional observations from the listed Saudi firms for three years between 2006 and 2008. I find that firm financial performance measured by the accounting rate of return on assets and rate of return on equity generally improves as ownership concentration increases. I also find that there exists a hump-shaped relationship between ownership concentration and firm performance, in which firm performance peaks at intermediate levels of ownership concentration. The study provides some empirical support for the hypothesis that as ownership concentration increases; the positive monitoring effect of concentrated ownership first dominates but later is outweighed by the negative effects, such as the expropriation of minority shareholders. The empirical findings shed light on the role ownership concentration plays in corporate performance, and thus offer insights to policy makers interested in improving corporate governance systems in an emerging economy such as Saudi Arabia.
After the global financial crisis, the topic of corporate governance has been gaining momentum in accounting and finance literature since it may influence firm and bank management in many countries. Corporate Governance and Its Implications on Accounting and Finance provides emerging research exploring the implications of a good corporate governance system after global financial crises. Corporate governance mechanisms may include board and audit committee characteristics, ownership structure, and internal and external auditing. This book is devoted to all topics dealing with corporate governance including corporate governance characteristics, board diversity, CSR, big data governance, bitcoin governance, IT governance, and governance disclosure, and is ideally designed for executives, BODs, financial analysts, government officials, researchers, policymakers, academicians, and students.
Abstract: This study investigates the impact of the separate elements of corporate governance on enterprise financial performance explained in three separate models (ROA, ROE, and Debt Ratio) for non-financial companies present within the S&P Pan Arab Composite Index. The data on corporate governance choices includes 225 firms for ten years from 2006 to 2015 gathered from ORBIS, Reuters Eikon, Datastream, as well as, annual and board reports. The firms included in this study are all listed respective to their country's stock exchange, which are present in eleven Arab countries namely: Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia and United Arab Emirates. The corporate governance variables are divided into board structure variables, ownership structure variables, and controlled variables. Furthermore, the topic attempts to understand the significance of the Arab Spring uprising on firm performance using the ROA and ROE measurements and debt ratio as a measurement of firm leverage. Furthermore, the data is used to compare the corporate governance variables five years before the Arab Spring uprising to the five years during/after the uprising. Regression results are demonstrated in the form of models. Model 1 shows the effect of corporate governance on firm performance measured by ROA. Results show that there is a significant positive relationship with board size, institutional ownership, audit type on firm performance measured by ROA, also there a significant negative relationship with duality, foreign ownership, firm size and the revolution variable on firm performance measured by ROA. Model 2 shows the effect of corporate governance on firm performance measured by ROE. Results show that there is a significant positive relationship with board size, institutional ownership, audit type on firm performance measured by ROE, also there a significant negative relationship with duality, firm size and the revolution variable on firm performance measured by ROE. Model 3 shows the effect of corporate governance on firm performance measured by Debt Ratio. Results show that there is a significant positive relationship with director ownership, foreign ownership, firm size, foreign exchange rate and the revolution variable on firm performance measured by Debt Ratio, also there a significant negative relationship with duality, institutional ownership and firm age on firm performance measured by ROE. After conducing Mann-Whitney U test, results show that the variables ROA, ROE, ownership concentration, director ownership, institutional ownership, foreign ownership, firm size, firm age, foreign exchange rate, outward foreign direct investment and inward foreign direct investment were a higher mean rank before the Arab Spring uprising compared to during/after the Arab Spring uprising. On the other hand, the variables ownership concentration, director ownership, institutional ownership, foreign ownership, firm size, firm age and GDP were a higher mean rank during/after the Arab Spring uprising compared to before the Arab Spring uprising.
This book encapsulates the advanced concept of sustainable management and will enlighten readers to understand this concept for practical applications. The book's salient features are as follows: • Illustrates the basic concepts of human psychology causing risk factors such as burnout; • Differentiates adaptive sustainable measures and management practices; • Emphasizes sustainable agriculture management to confront the current dynamic environment and defines specific rules for enterprise development while coping with global climate change; • Assesses inertia with respect to economic development; • Constructs the linkage between technological strategies and innovation among construction companies; • Demonstrates non-financial reporting through theoretical and empirical evidence; • Elucidates the principles of equality, elaborating the managing of equality and diversity in a Steiner school
This dissertation is concerned with the state of corporate governance regulations and implementation in the UAE and the extent to which board and corporate ownership structures in UAE listed firms play a role in promoting sound corporate governance and enhancing firms’ financial performance. The main objective of this dissertation is to investigate the influence of various corporate governance mechanisms on the financial performance of UAE publicly listed companies. Using ten years of panel data from 92 UAE companies (406 firm-year observations) listed on Abu Dhabi Exchange (ADX) and Dubai Financial Market (DFM), we test the role of board characteristics along with firms’ ownership structure on firm performance. Ordinary Least Squares (OLS) along with fixed effect and random effects panel regressions are used. Our results indicate that board independence, women board membership, ownership concentration, lack of CEO/board chair duality and family ownership all have, albeit with varying degrees of significance, positive effects on firm performance. On the contrary, cross ownership and state ownership seem to affect negatively the financial performance of UAE firms. For reasons, most likely, unique to the UAE, the empirical tests conducted by this research do not provide evidence of an impact of board size and foreign ownership on firm performance. Our main findings are robust to different measures of ownership concentration and to two forms of state ownership. They are also robust to further firm characteristics such as the size, age, and leverage and persist for both financial and nonfinancial firms. The dissertation is unique in many respects: it is the first comprehensive work that conducts such all-encompassing test of corporate governance hypotheses on UAE firms. It utilizes a unique database that was, specifically hand-collected for our study. It tests the relevance of corporate governance theories in the specific UAE institutional and economic setting.The findings of this dissertation are of great importance to the regulators and policy makers to understand the impact of currently adopted corporate governance regulations amongst the listed firms and to develop tailored policies to the context of UAE and suitable mechanisms to enforce those policies and regulations. Our findings may also be generalized to GCC and MENA countries given that they tend to share similar economic, social and political environments.
Establishing a corporate governance strategy that promotes the efficient use of organisational resources is instrumental in the economic growth of a country, as well as the successful management of firms. This book reviews existing literature and identifies board structural features as key variables of an effective corporate governance system, establishing a multi-theoretical model that links Board structural characteristics with firm performance. It then, using a comprehensive empirical study of 265 companies listed on the Karachi Stock exchange, tests this conceptual model. This research serves as a significant milestone, reflecting the socio-economic setting of emerging economies, and highlighting the need for the corporate sector in emerging markets to move away from a 'tick-box' culture. It argues that the sector needs to implement corporate governance as a tool to mitigate business risks; appoint and empower non-executive directors to achieve an effective monitoring of management; and establish their own ethical and governance principles, applicable to the Board of Directors. Based on an extensive data base, collected painstakingly over five years, this book offers new insights and conceptual framework for further research in this area. Given the breadth and width of the research, it is a useful source of future reference for students, researchers and policy makers.
This paper investigates the effect of internal corporate governance mechanisms and control variables, such as bank size and bank age on bank financial performance. The sample of this study comprises of both conventional and Islamic banks operating in the seven Arabian Peninsula countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, and Yemen. Regression analysis (OLS) is used to test the effect of corporate governance mechanisms on bank financial performance. The results of this study reveal that there is a significant relationship between corporate governance and bank profitability. Board size, board activism, number of outside directors, and bank age significantly affect Tobin's Q. Meanwhile, ROA and PM are affected by ownership concentration, audit committee, audit committee meetings, and the age & size of the bank. The results are consistent with previous literature that the correlation between corporate governance and firm performance is still not clearly established and that impact of corporate governance on bank financial performance in developing countries is still relatively limited.
This work explores how external constraints affect organizations and provides insights for designing and managing organizations to mitigate these constraints. All organizations are dependent on the environment for their survival. It contends that it is the fact of the organization's dependence on the environment that makes the external constraint and control of organizational behaviour both possible and almost inevitable. Organizations can either try to change their environments through political means or form interorganizational relationships to control or absorb uncertainty.
