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

Abdallah, Abed Al‐Nasser; Ismail, Ahmad

doi:10.1016/j.intfin.2016.08.004

Cited by 203 publications

(202 citation statements)

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“…However, state control has often been associated with weak governance and poor managerial incentives (Okhmatovskiy, 2010). On the other hand, some contrary views on the benefits of governmental ownership on corporate governance are offered, for example, by Abdallah and Ismail (2017) for the GCC countries. Relatedly, Borisova et al (2012) find that state ownership is associated with weaker corporate governance but only in countries with less protective legal systems.…”

Section: Agency Problemsmentioning

confidence: 99%

“…Empirically, Muravyev (2002) finds that strategic state ownership performs better than other state ownership, while Yu (2013) finds that Chinese majority state control is associated with more political benefits and thus outperformance compared with minority ownership. For GCC countries, Abdallah and Ismail (2017) document that the positive effects from corporate governance on performance are highest when the majority shareholders are the government or local corporations [3]. Overall, the performance effects of state control in Russia seems to depend on the ownership form such as relative size, the type (e.g.…”

Section: Introductionmentioning

confidence: 99%

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Complex state ownership, competition, and firm performance – Russian evidence

Liljeblom

Maury

Hörhammer

2019

IJOEM

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Purpose -State ownership has been common especially in industries with restricted competition. In Russia, state-controlled firms represent around 41 percent of the market value of all listed firms (Deloitte, 2015). Yet, there is a significant gap in the literature regarding the effects of various forms of government control in listed firms. The purpose of this paper is to fill this gap by exploring the impact of the complexity of state ownership and competition on the performance of Russian listed firms. Design/methodology/approach -The sample consists of data for 72 firms (360 firm-years) in the Russian MOEX broad market index during 2011-2015. The complexity of state ownership is captured by studying forms of state control including majority/minority, direct/indirect, federal/regional, mixed structures and golden shares. Findings -The authors find significant differences in performance relating to different forms of state ownership. State control is negatively related to firm valuation and the sales/employees ratio. Performance is weakest when state ownership takes the form minority, regional or direct ownership. State control through golden shares typically outperforms other state-controlled firms. The authors find indications of employment prioritization beyond the economical optimum. In addition, the relation between state ownership and profitability becomes positive in sectors where state firms appear to enjoy lower competition. Originality/value -While the effects of state ownership have been studied on many markets, there is a lack of studies on the effects of different forms, or the complexity, of state ownership beyond direct and indirect ownership. The authors contribute to the literature on the performance effects of state ownership by studying a multitude of forms of governmental ownership as well as the role of competition in Russia. Especially the profitability of state-controlled firms is significantly affected by industry characteristics. Implications of the results are discussed both from firm and policy maker perspectives.

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Section: Agency Problemsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Complex state ownership, competition, and firm performance – Russian evidence

Liljeblom

Maury

Hörhammer

2019

IJOEM

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“…In this section, we start by exploring the firm performance measurement in the banking industry. The return on assets (ROA) and Tobin's Q is commonly used as the proxies of firm performance in GCG research (Klapper and Love, 2004;Basu et al, 2007;Mashayekhi and Bazaz, 2008;Munisi and Randoy, 2013;Sarpal, 2015;Abdallah and Ismail, 2016;Chou and Buchdadi, 2017). The return on assets (ROA) is an accounting-based measures performance, while the Tobin's Q is market value-based measures performance.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Chou¹,

Buchdadi²

2018

JBRMR

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This study aims to examine the relationship between executive's compensation and firm performance in the banking industry in Indonesia. This study also determines the impact of remuneration and nomination committee (RNC) on executive's compensation (EC) and firm performance. The samples are listed bank in Indonesia during 2006-2015. The regression uses two stage least square (2SLS) with unbalanced panel data. The findings reveal that performance on pay and pay on performance are valid in Indonesia. However, the performance is only for accounting-based performance but not for market value-based performance. Furthermore, in examining the role of remuneration and nomination committee (RNC), the findings reveal that the RNC has a negative relationship to the executives' compensation (ES). It seems the role of the RNC is preventing the overpaid of the EC. Finally, regarding the ownership structure, The state banks have the similar behavior with the main findings in this research. However, only in the state bank, the RNC has a real impact on both accounting-based performance and market value-based performance. While ownership concentration (BO) variable which is used as dependent variables in this study reveals the possibility of the agency problems or inactive block holders condition that make ineffective monitoring role of the corporation since the findings show that the more BO, the more EC, and the worse firms performance.

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“…Investors inclined to support those companies with a high awareness of CSR, which implies the effectiveness of increasing company value or enhancing corporate performance by devoting CSR actions [48]. To conclude, most of the research in different continents corroborated the positive influence of corporate governance or CSR on improving performance [49]. Company performance and CSR To summarize, the above-discussed topics related to the four dimensions of the CGES directly or indirectly; some research topics could be associated with even over one aspect.…”

Section: Mainstream Research Topics Of Corporate Governancementioning

confidence: 92%

Strengthen Financial Holding Companies’ Business Sustainability by Using a Hybrid Corporate Governance Evaluation Model

Huang¹,

Shen²,

Shieh³

et al. 2018

Preprint

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While the importance of corporate governance has been broadly acknowledged in global financial markets and academic research, how to devise a practical evaluation system is relatively unexplored. This paper attempts to refine the Corporate Governance Evaluation System (CGES), constructed by the Taiwan Stock Exchange (TWSE) since 2014. The current CGES has several debatable issues in its complicated design (e.g., it comprises over 80 indicators in different types). To resolve those issues, this study invited ten senior domain experts (including several CEOs of financial holding companies) to retrieve 13 essential criteria from the CGES in four dimensions. And this study integrates several multiple criteria decision-making (MCDM) methods (i.e., Decision-making trial and evaluation laboratory (DEMATEL), modified VIKOR, DEMATEL-based analytical network process (DANP)) and the fuzzy evaluation technique to rank the exemplary companies. The obtained ranking is consistent with the one released from the CGES in 2017. This study conducted additional experiments to ensure the robustness of the findings. The newly devised model not only supports the ranking decisions but also provides a managerial guidance for companies to pursue systematic improvements. These findings enrich the understanding of corporate governance and contribute to gaining business sustainability for financial holding companies.

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

Cited by 203 publications

References 77 publications

Complex state ownership, competition, and firm performance – Russian evidence

Complex state ownership, competition, and firm performance – Russian evidence

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Strengthen Financial Holding Companies’ Business Sustainability by Using a Hybrid Corporate Governance Evaluation Model

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

Cited by 203 publications

References 77 publications

Complex state ownership, competition, and firm performance – Russian evidence

Complex state ownership, competition, and firm performance – Russian evidence

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Strengthen Financial Holding Companies&rsquo; Business Sustainability by Using a Hybrid Corporate Governance Evaluation Model

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Strengthen Financial Holding Companies’ Business Sustainability by Using a Hybrid Corporate Governance Evaluation Model