The role of corporate governance in attracting foreign investment: An empirical investigation of Saudi‐listed firms in light of vision 2030

Abstract

Following the introduction of the Saudi Vision 2030, diverse developments have been considered concerning corporate governance as an effort to open Saudi Arabia's economy to the world. Identifying the significance of attracting foreign investment is considered an approach to accomplish one of the vision's targets. The objective of this study is to investigate the impact of improved corporate governance policies on the magnitude of foreign investment. Regression analysis was employed using the data of 153 listed companies in the Saudi Stock Exchange (Tadawul) from 2015 to 2019 to examine the effect of three corporate governance indicators on foreign investment. Specifically, ownership structure was represented by institutional ownership, ownership concentration and managerial ownership. Board composition was identified by board size and independence. Executive pay was measured by the total top executive pay and the presence of long-term incentive plans (LTIPs). Findings indicated that foreign investment is positively associated with ownership concentration, board independence and the presence of LTIPs in compensation packages. A negative and significant association was found with institutional ownership and managerial ownership.

CEO Characteristics, Family Ownership and Corporate Social Responsibility Reporting: The Case of Saudi Arabia

“…Third, in 2016, Saudi Arabia embarked on a plan (Saudi Vision 2030) to diversify its economy beyond oil. In an effort to attract more foreign investment and intensify the privatization of state-run companies, the government has greenlighted the appointment of foreigners at the head of state-run companies [20,21]. Therefore, the role of foreign CEO towards firm CSR disclosure policy in Saudi Arabia is an empirical issue.…”

“…Third, in 2016, Saudi Arabia embarked on a plan (Saudi Vision 2030) economy beyond oil. In an effort to attract more foreign investment and privatization of state-run companies, the government has greenlighted th of foreigners at the head of state-run companies [20,21]. Therefore, the CEO towards firm CSR disclosure policy in Saudi Arabia is an empirica most Saudi Arabian firms are family-owned or controlled by families [22, to [24], three Saudi families control more than 41% of executive board pos listed firms, and these families dominate the boards of 68 listed firms ou listed firms.…”

Corporate Governance Dynamics: Contending with Egocentric Leadership and Enhancing Board Efficacy

“…This means that organisations prioritise corporate governance are highly likely to perform better in the long run. Alregab (2023) empirically analysed the role of corporate governance in attracting foreign investment in Saudilisted firms in light of Vision 2030. The findings of the study showed that corporate governance positively correlates with foreign investment.…”

“…This approach will help prevent immoral actors from undermining the efforts of organisations to promote good governance. Good governance is crucial in attracting investors to an organisation, which, in turn, benefits the entire country (Alregab, 2023). Therefore, organisations must prioritise corporate governance to enhance their reputation, build trust with stakeholders, and contribute to the country's development and the business world.…”

The Role of Corporate Governance Mechanisms in limiting Creative Accounting Practices: A View from Specialists in Middle East Countries

“…It is generally identified as the method of practicing good management, or more precisely, wise management [19]. Corporate governance is defined as "the set of laws, rules and standards that define the relationship between the company's management on the one hand, and shareholders, owners and stakeholders on the other hand" [20]. The objectives of corporate governance is to maximize firm performance by achieving economic efficiency and to develop systems that constrain the firm"s management within an ethical framework that is based on guarantees of accountability and transparency.…”