Ownership structure, corporate governance reform and firm performance: evidence from Kuwait Online publication date: Thu, 20-Jul-2023
by Abdullah E. Alajmi; Andrew C. Worthington
International Journal of Corporate Governance (IJCG), Vol. 13, No. 4, 2023
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.
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