The Saudi monarchy and economic familism in an era of business environment reforms

Mazaheri, Nimah

doi:10.1515/bap-2012-0039

Cited by 21 publications

(20 citation statements)

References 41 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A competing argument suggests that connected firms extracting private benefits may choose a single auditor, possibly of lower quality, to hide their expropriation activities (Chaney, Faccio, & Parsley, 2015). The rent‐seeking behavior and interests of politically connected firms of the royal family are usually protected by the monarchy (Mazaheri, ), and this protection allows more opportunities to divert corporate resources, as these firms tend to be subject to fewer disciplinary constraints from regulators. In addition, non‐royal entrepreneurs “gain a major advantage in the market if they are able to get a royal patron on board with a project.…”

Section: Literature Review and The Development Of Hypothesesmentioning

confidence: 99%

“…In addition, non‐royal entrepreneurs “gain a major advantage in the market if they are able to get a royal patron on board with a project. Thus, royal private sector elites are not the only ones who have directly benefited and built up their business activities over time: a layer of non‐royal entrepreneurs are also capitalizing on this branding of the ‘royal private sector’ through personal, familial, and business relationships” (Mazaheri, , p. 315). Given the conflicting evidence regarding the joint audit implications for cost of debt for firms with political connections, we develop the following hypothesis:Hypothesis Political connections with royal families moderate the association between joint audit and cost of debt financing.…”

Section: Literature Review and The Development Of Hypothesesmentioning

confidence: 99%

See 1 more Smart Citation

Joint audit, political connections and cost of debt capital

et al. 2017

View full text Add to dashboard Cite

We investigate the association between joint audit and cost of debt for a sample of non-financial, publicly listed firms from the Gulf Cooperation Council (GCC) countries. Although the conventional wisdom suggests that "two heads are better than one", empirical evidence on the beneficial impact of joint audit has not been convincingly documented. We attempt to shed further insights into this debate, using data from the GCC countries. We document a significantly negative effect of joint audit on cost of debt in the GCC countries. This effect is more pronounced in cases where at least one of the joint audit firms is a Big 4 auditor. We then investigate whether political connections with royal families moderate the association between joint audit and cost of debt. Our results suggest that the beneficial effects of joint audits, in terms of a lower cost of debt, are greater in firms with such political connections.

show abstract

Section: Literature Review and The Development Of Hypothesesmentioning

confidence: 99%

Section: Literature Review and The Development Of Hypothesesmentioning

confidence: 99%

Joint audit, political connections and cost of debt capital

et al. 2017

View full text Add to dashboard Cite

show abstract

“…This survey also reports that royal family directors represent 60 percent of the GCC equity capitalization. Thus, a fairly small and tightly knit economic elite remarkably controls the financial markets in the GCC, which results in a power imbalance and a greater level of information asymmetry (Al-Sehali & Spear, 2004;Mazaheri, 2013).…”

Section: Introductionmentioning

confidence: 99%

Risk Committee, Firm Life Cycle, and Market Risk Disclosures

Al‐Hadi¹,

Hasan²,

Habib³

2015

Corporate Governance

148

217

View full text Add to dashboard Cite

Manuscript Type: EmpiricalResearch Question/Issue: This study investigates whether the existence of a separate risk committee and risk committee characteristics are associated with market risk disclosures. It also tests whether the role of a risk committee in affecting market risk disclosures varies for different firm life cycle stages. Research Findings/Insights: Using 677 firm-year observations of financial firms from Gulf Cooperation Council (GCC) countries during the years 2007-2011, we find that firms with a separate risk committee are associated with greater market risk disclosures, an effect that is more pronounced for mature-stage firms. Furthermore, findings suggest that risk committee qualifications and size have a significant positive impact on market risk disclosures. Theoretical/Academic Implications: This study complements the corporate governance literature by incorporating agency theory, legitimacy theory, stakeholder theory, and the resource-based theory to provide more robust evidence of the impact of a separate risk committee and the firm life cycle on market risk disclosures. Our results support the monitoring effect of a separate risk committee and suggest that a separate risk committee can improve "firm-level corporate governance" in the GCC countries characterized by a poor informational environment. Practitioner/Policy Implications: Findings from this study provide evidence that the existence, qualifications, and size of risk committees may be used as a channel to improve the disclosure level, suggesting a policy prescription for regulators and policymakers. Investors may also find these results useful in forming their own expectations about firm-level risk disclosures.

show abstract

“…Second, corporate governance practices and codes in the GCC are distinct, due to the complexities of the institutional and cultural settings that distinguish its member states from other developed and well-established emerging economies (Bley and Chen 2006;Baydoun et al 2012;Mazaheri 2013). For example, compliance with corporate governance codes is not mandatory in most GCC countries.…”

Section: Introductionmentioning

confidence: 99%

Multiple directorships, family ownership and the board nomination committee: International evidence from the GCC

Eulaiwi

Al‐Hadi

Taylor

et al. 2016

Emerging Markets Review

View full text Add to dashboard Cite

In this paper, we investigate the association between outside board directorships and family ownership concentration. Using a sample of 1091 firm-year observations of non-financial publicly listed firms from Gulf Cooperation Countries (GCC) during the 2005 to 2013 period, we find a positive association between family ownership and the number of outside directorships held by board members. This finding is consistent with the notion that family ownership reduces a board's monitoring capabilities. We also test whether the recent corporate governance reforms in GCC, which were designed to protect investors and minority shareholders, affect firms' incentives to establish a board nomination committee (NC). We find the existence of a board NC and the quality and characteristics of NC membership act to suppress the positive association between outside directorships and family ownership. Our results are robust to the use of alternative measures of outside directorships and family ownership and models that test for endogeneity. Overall, our results suggest that the institutional specificities of emerging economies such as those in the GCC can sustain high levels of multiple directorships, which could impair the quality of corporate governance.

show abstract

The Saudi monarchy and economic familism in an era of business environment reforms

Cited by 21 publications

References 41 publications

Joint audit, political connections and cost of debt capital

Joint audit, political connections and cost of debt capital

Risk Committee, Firm Life Cycle, and Market Risk Disclosures

Multiple directorships, family ownership and the board nomination committee: International evidence from the GCC

Contact Info

Product

Resources

About