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

Abstract

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.

Digital Technologies, Investor Sentiment, Limits to Arbitrage and Value of Firm Cash Holdings in China's A Stock Market is Good

“…The Chinese capital market is an emerging capital market, which is dominated by individual investors. At the end of year 2021, the total number of investors in China's A share is 247,150,884 and the number of individual investors is 247, 000, 000, this implies that personal investors dominant this market (He et al, 2021;Wirsbinna & Grega, 2021;Alruwaili et al, 2023;Burca et al, 2022). Compared with institutional investors, personal investors are more likely to be extremely pessimistic or optimistic, which may lead to undervaluation or overvaluation of securities.…”