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Corporate governance practices, ownership structure, and corporate performance in the GCC countries

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  • Abdallah, Abed Al-Nasser
  • Ismail, Ahmad K.

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.

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  • Abdallah, Abed Al-Nasser & Ismail, Ahmad K., 2017. "Corporate governance practices, ownership structure, and corporate performance in the GCC countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 98-115.
    • Handle: RePEc:eee:intfin:v:46:y:2017:i:c:p:98-115
    DOI: 10.1016/j.intfin.2016.08.004
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    Keywords

    Corporate governance; Performance; Ownership structure; Transparency; Financial disclosure;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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