Allam Mohammed Mousa Hamdan

The moderating role of corporate governance on the relationship between intellectual capital efficiency and firm's performance: evidence from Saudi Arabia

This study examined the moderating role of corporate governance on the interaction between intellectual capital efficiency and financial, operational and market performance. The study used a pooled data of 171 firms listed on the Saudi Stock Exchange during the period from 2012 to 2014. Multiple regression approach was incorporated under fixed-effect method. The findings revealed that the inclusion of corporate governance as a moderating variable has influenced positively the relationship between intellectual capital components and financial, operational and market performance. In addition, only capital employed efficiency positively affects financial performance, while structural capital efficiency and capital employed efficiency positively affect the operational performance. As for market performance, it was affected positively by all the Intellectual capital components. Further, the findings showed that the larger firms, the higher level of human capital efficiency, and smaller firms, the higher level of structural capital and capital employed efficiency.

The Impact of Audit Committee Characteristics on Earnings Management: Additional Evidence from Jordan

This research investigates the impact of audit committees’ characteristics (audit committee size, independence, activity, financial expertise, and percentage of common stocks owned by audit committee) on improved accounting conservatism and earnings management practices for a sample of 50 Jordanian industrial corporations listed in Amman Stock Exchange (ASE) during the period of 2004-2009. The study measures accounting conservatism using book-to-market approach and ratio of total accruals to gross profit. By using Pooled Data Regression the study found the audit committee characteristics examined are not significantly related to accounting conservatism with the exception of financial experience of audit committee which was found to have a positive relationship to conservatism.

Corporate governance and voluntary disclosure: evidence from Bahrain

This study examined the relationship between corporate governance and voluntary disclosure. The study used a cross-sectional data for the year 2013 of 41 firms listed on Bahrain Bourse. Multiple regression approach was incorporated. The study found that the governance level was 47.1%. Voluntary disclosure percentage was found to be 51.1% in Bahrain Bourse which is considered high compared to previous studies. The results of the study test indicate that there is a positive relationship between the principals: ownership of the largest shareholder, size of the board of directors and independency of board of directors with voluntary disclosure, and that there is no relationship between ownership of the three largest shareholders and voluntary disclosure.

The moderating role of governmental support in the relationship between entrepreneurship and economic growth: A study on the GCC countries

The purpose of this paper is to find out the extent to which governments of the Gulf Cooperation Council (GCC) countries play a moderating role in the relationship between entrepreneurship and economic growth.,The study uses a 10-year time series (2006-2015) for six GCC countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. Secondary sources of data were collected from The World Bank database, general available statistics on the GCC, the Global Entrepreneurship Index from the Global Entrepreneurship and Development Institute (GEDI) and the Global Entrepreneurship Monitor (GEM) database.,Results indicate that governmental support has a significant moderating effect on the relationship between entrepreneurship and economic growth in the GCC. Furthermore, the strongest indicators of entrepreneurial investments in the Gulf have been found to be risk capital and high growth, which indicate a rapid growth in entrepreneurial investments. The lowest scoring indicators were found to be technology absorption and innovation process.,Despite the necessary measures taken to assure standard results such as testing data validity, care should be taken when generalizing the research results mainly because the time series of the study (2006-2015) could have been affected by the International and Financial Crisis, though the study has taken this into consideration.,This study has clarified the significant role of GCC governments in moderating the relationship between entrepreneurship and economic growth. Thus, the findings of this study are important because they help the GCC governments recognize their significant role and hence to utilize this role by supporting new and existing entrepreneurs particularly through regulatory quality, risk capital, technology absorption and process innovation. Furthermore, this study proves the extent to which entrepreneurship can help enhance the GCC economic growth, hence elaborating the importance of the sustainable resource, such as the human capital, in achieving diversification of sources to move from an oil-based to a more diversified economy.

Board interlocking and firm performance: the role of foreign ownership in Saudi Arabia

Purpose The purpose of this paper is to investigate what effect, if any, foreign ownership has on the relationship between board interlocking and firm performance. Design/methodology/approach Data on 131 firms from various sectors listed in the Saudi Financial Market during the period of 2016 were collected. Board interlocking was measured using two indicators (number of interlocks and number of interlocks per member) and then it was divided into three levels (1-6/7-14/15 or more). As for the performance of firms, it was measured using two indicators: one operational (return on assets and the other financial (return on equity)). Foreign ownership was considered as a moderator variable. In addition to firm and board characteristics, a set of control variables related to ownership structure was used. Findings Results provide some support for the “busyness hypothesis” which postulates deterioration in the effectiveness of directors, in terms of their monitoring role, when increasing the number of interlocks per director. Results also manifest a positive effect exerted by foreign ownership in terms of turning around the otherwise negative relationship between board interlocking and firm performance in the second level of interlocking (7-14) Code Article 12’s limit on the number of interlocking per director to a maximum of five directorships. However, there is limited compliance to this code among Saudi firms. The study indicates the need to comply with the governance code in order to enhance governance which undercut performance. Originality/value Highlighting the role of foreign ownership in enhancing corporate governance in a conservative business environment characterized by relational networks with gaps in corporate governance.

Intellectual capital and firm performance: Differentiating between accounting-based and market-based performance

Purpose This study sheds light on the relation between intellectual capital and firm performance. The study argues that traditional performance measurement based on accounting is still able to explore the relation between intellectual capital and performance. Design/methodology/approach The study was conducted at 198 firms from two Gulf Cooperation Council countries: Kingdom of Saudi Arabia and Kingdom of Bahrain for the period 2014–2016. To measure intellectual capital, the value added intellectual coefficient model was adopted along with two measures of performance: accounting-based performance which is return on assets and market-based performance which is Tobin’s Q, in addition to the Random-Effects Regression. Findings Study findings came up with evidences that support the relationship between intellectual capital and accounting-based performance, but negates any relation between intellectual capital and market-based performance. The findings also revealed different results, between Saudi Arabia’s and those of Bahrain. Originality/value The study contributes to the debate on the validity of relating intellectual capital to the traditional accounting-based performance.

Educational governance and challenges to universities in the Arabian Gulf region

Abstract Higher education institutions in the Arabian Gulf region today, which have mushroomed and proliferated in the past ten to fifteen years, have been constructing themselves along models of Western universities at the levels of governance, programs, and structure. At the outset of the twenty-first century, universities have globally experienced a drastic shift in their governance from ‘republics of scholars’ to stakeholder organizations. In this paper, we discuss and deconstruct some of the consequences of that drastic shift, paramount among which is the downsizing and neglect of some sciences/fields. We discuss some of the major problems that the Market Model of the University is facing in the West through a literature review. We also explore the academic view on some problems and challenges facing University governance today in the globe at large and specifically in the Arabian Gulf Region. We believe that universities in this region in their present state face the serious challenge of generating indigenous knowledge that fulfills the needs of citizens within this region, knowledge that draws upon the culture, history, and geography of the area and responds to the specific needs of citizens in this area.

The impact of board independence on accounting-based performance: Evidence from Saudi Arabia and Bahrain

Purpose The purpose of this paper is to explore the effect of board independence on firm’s performance from the Stewardship theory perspective. Design/methodology/approach The study uses panel data of 162 firms listed in Bahrain Bourse and Saudi Stock Exchange during the period of 2013-2015. It also uses several econometric techniques to confirm the robustness of the results, such as firm fixed-effect approach and two-stage least squares (2SLS) in order to overcome the endogeneity which exists in such relations. Findings The study found an inverse effect of board independence on firm performance which was measured using two accounting-based measures: return of assets and return on equity. Based on these results, it was found that internal directors are more effective in enhancing performance of the firm than independent directors as information asymmetry problem and lack of firm-specific experience hinders the ability of independent directors of taking proper decisions that enhance firms performance. Originality/value The study contributes to the ongoing debate about the relation between board independence and firms performance in emerging markets, focusing on Saudi and Bahraini markets which have recently sought to form a system of laws that aims at protecting investors. The study indicates the importance of such laws rather than traditional governance measurements in enhancing performance.

Market power versus efficient-structure in Islamic banking industry: evidence from selected GCC countries

The study aims at testing market power theories and their role in explaining Islamic banks performance in Gulf Cooperation Council GCC. Depending on the data of 22 Islamic banks in the period of (2008-2013). Using measuring models, market power theories could not explain GCC Islamic banks returns, as these results showed that there is no evidence of monopoly in Islamic banks market structure that would affect its performance. There is an effect for traditional efficiency in its performance. This sector is characterised by the presence of high competition and diffused market shares. There should be a future research about the role of economic efficiency theories in explaining GCC Islamic banks returns.