Title: Ownership structure, corporate governance reform and firm performance: evidence from Kuwait

Authors: Abdullah E. Alajmi; Andrew C. Worthington

Addresses: Department of Accounting, Public Authority for Applied Education and Training, P.O. Box 23167, Safat, 13092, Kuwait ' Department of Accounting, Finance and Economics, Griffith University, 170 Kessels Road, Nathan QLD 4111, Australia

Abstract: This paper examines the link between ownership structure and firm performance in Kuwaiti industrial and services sector firms over the period 2010-2021 in the regulatory context of recent and extensive corporate governance code reform. Panel data regression analysis with robust and clustered standard errors of firm performance for 980 listed industrial and services firms in Kuwait over an 11-year period. All measures of firm performance were found to positively relate to family, local institutional, and government ownership, accounting for anywhere between 12% and 28% of the variation in firm performance. The study is unique in incorporating ownership structure types and analysing ownership structure reforms in Kuwait, which progressed from no governance code to a compulsory regime. The findings suggest that the complexity of ownership structure law and guidelines, the difficulty of changing firm behaviour, and self-selection of firms in regulated markets make it challenging to model the ownership structure-firm performance relationship.

Keywords: corporate governance reform; leverage; debt to equity; Tobin's Q; Kuwait.

DOI: 10.1504/IJCG.2023.132453

International Journal of Corporate Governance, 2023 Vol.13 No.4, pp.315 - 342

Received: 07 Nov 2022
Accepted: 13 Feb 2023
Published online: 20 Jul 2023 *

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