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The role of corporate governance strength in crisis and non-crisis times

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Listed:
  • Bakr Al-Gamrh
  • Ku Nor Izah Ku Ismail
  • Redhwan Al-Dhamari

Abstract

This study evaluates corporate governance practices of listed firms in the United Arab Emirates and investigates whether corporate governance mitigates/exacerbates the impact of leverage and risk on firm performance during crisis and non-crisis times. The study constructs a corporate governance index not only to examine the dispute of the role of corporate governance during the crisis but also its influence on other factors that fuelled the crisis. A firm-level panel data is used that spans the period 2008–2012 of all listed firms on Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM). The study finds a positive influence of corporate governance strength on the accounting performance, but a negative influence on the firms’ economic performance. In normal times, corporate governance mitigates the negative influence of leverage and risk on the accounting and economic firm performance. However, this synergy effect varies across performance indicators during crisis.

Suggested Citation

  • Bakr Al-Gamrh & Ku Nor Izah Ku Ismail & Redhwan Al-Dhamari, 2018. "The role of corporate governance strength in crisis and non-crisis times," Applied Economics, Taylor & Francis Journals, vol. 50(58), pages 6263-6284, December.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:58:p:6263-6284
    DOI: 10.1080/00036846.2018.1489513
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    Cited by:

    1. Faiza Zulfiqar & Najam Us Sahar & Raja Nabeel-Ud-Din Jalal & Muhammad Akhtar & Um-E-Roman Fayyaz & Michelina Venditti, 2022. "Nexus Between Financial Crises, Corporate Governance and Future Stock Price Crash Risk," SAGE Open, , vol. 12(4), pages 21582440221, October.
    2. Sultan Sikandar Mirza & Tanveer Ahsan, 2020. "Corporates' strategic responses to economic policy uncertainty in China," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 375-389, February.
    3. Fatima Faruqi & Tanveer Ahsan & Sultan Sikandar Mirza & Zia-ur-Rehman Rao, 2019. "Corporate Governance, Cash Flows, and Bank Performance: Developed and Developing Countries," Multinational Finance Journal, Multinational Finance Journal, vol. 23(1-2), pages 1-36, March - J.

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