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The impact of COVID-19 on firm risk and performance in MENA countries: Does national governance quality matter?

Author

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  • Hamza Almustafa
  • Quang Khai Nguyen
  • Jia Liu
  • Van Cuong Dang

Abstract

This study investigated the impact of the COVID-19 crisis on firm risk and performance in different country-level governance qualities in the MENA region. Analyzing a sample of 739 non-financial listed firms in 12 MENA countries for the period 2011–2020, we found that the COVID-19 crisis negatively impacted the performance of firms, especially low-performance firms, in most industries, and increased firm risk in general. Moreover, we found that national governance quality plays an important role in mitigating the negative impact of the COVID-19 crisis on firm operations. Specifically, national governance quality reduces the negative impact of the COVID-19 crisis on firm performance and the positive impact of the crisis on firm risk. The results are consistent with our contention that national governance quality contributes to creating a positive environment for businesses activities and reducing economic shocks.

Suggested Citation

  • Hamza Almustafa & Quang Khai Nguyen & Jia Liu & Van Cuong Dang, 2023. "The impact of COVID-19 on firm risk and performance in MENA countries: Does national governance quality matter?," PLOS ONE, Public Library of Science, vol. 18(2), pages 1-24, February.
    • Handle: RePEc:plo:pone00:0281148
    DOI: 10.1371/journal.pone.0281148
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    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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