IFRS innovation, governance practices and firm performance: A new empirical assessment of moderating effects across GCC region

• Authors: Waleed S. Alruwaili , Abdullahi D. Ahmed , Mahesh Joshi

Abstracts

EN

Research background: Despite the large volume of research which has been conducted, the association between corporate governance mechanisms and firm performance remains a controversial issue, particularly with the growth of accounting settings around the world. Purpose of the article: This study assesses the moderating role of International Financial Reporting Standards (IFRS) on the association between corporate governance mechanisms and firm performance in selected Gulf Cooperation Council (GCC) country-listed firms, namely Saudi Arabia, Qatar, Bahrain, and United Arab Emirates over the period 2016–2019. Methods: Importantly, we examine the direct and indirect influences of royal family members on long-term firm performance. We attempt to answer our research questions using robust estimation methods such as pooled OLS, fixed effect, random effect and first difference models. Findings & value added: The outcome reveals a significant and positive impact of firm size and board size on the firm performance in the pooled sample, while there is a significantly negative influence of financial leverage on firm performance. The impact of RFP on FP is seen to be negative and significant while the interaction term is found to be positive and statistically significant. This notably refers to the possibility that royal family directors could play an essential role in influencing the executive management team to fully react to provide extensive voluntary disclosure and comply with IFRS adoption. Our simultaneous quantile regression analysis displays the influence of corporate governance mechanisms on firm performance in various stages. While we observe that IFRS transformation has improved information comparability, policy makes in GCC countries should continue to foster conducive environment to support innovative business practices that help diversify their economies.

Keywords

EN

IFRS innovation; governance practices; firm performance; Saudi listed firms; Gulf Cooperation Council countries (GCC); International Financial Reporting Standards (IFRS)

• Publisher: Instytut Badań Gospodarczych
• Journal: Equilibrium. Quarterly Journal of Economics and Economic Policy
• Year: 2023
• Volume: 18
• Issue: 3
• Pages: 615-659

Dates

published

2023

Contributors

author

Waleed S. Alruwaili

• RMIT University

• https://orcid.org/0000000276609037

author

Abdullahi D. Ahmed

• RMIT University

• https://orcid.org/0000000344720205

author

Mahesh Joshi

• RMIT University

• https://orcid.org/0000000157602449

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Identifiers

DOI

10.24136/eq.2023.020

Biblioteka Nauki

22398299