Title: Corporate governance and its effect on corporate performance using a dynamic panel model: evidence from Saudi Arabia

Authors: Qadri Aljabri

Addresses: College of Business Administration, University of Business and Technology, Jeddah, Saudi Arabia

Abstract: Capital market authority (CMA) in Saudi Arabia introduced principles of corporate governance in 2006, which were adopted by listed firms after facing a global financial crisis (Dubai Crisis) 2007/2008. CMA has the responsibility to regulate the Saudi stock market to increase investor confidence and protect the rights of shareholders. This study examines the association between governance mechanism and corporate performance using an upgraded dynamic panel model. Tradition estimation techniques such as static models are biased because of endogeneity issues. This study used various proxies of governance-mechanism and examines its relationship with corporate performance. The non-financial listed firm considers as the sample of the study for five years. The result shows the significant impact of corporate governance on corporate performance in the firms. The findings reveal that corporate governance principles help the firms to improve financial performance, and dynamic models are appropriate to examine the association between corporate-governance and corporate-performance.

Keywords: corporate governance; firm performance; agency theory; dynamic panel model; system GMM.

DOI: 10.1504/IJBEX.2024.136880

International Journal of Business Excellence, 2024 Vol.32 No.2, pp.162 - 182

Received: 28 Sep 2020
Accepted: 13 Jan 2021
Published online: 26 Feb 2024 *

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