Relationship between Capital Requirement, Ownership Structure, and Financial Performance in Saudi Arabian Listed Companies

Alawi, Suha Mahmoud

doi:10.18488/journal.aefr.2019.99.1077.1090

Cited by 8 publications

(6 citation statements)

References 46 publications

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“…Empirical evidence on the association between government ownership and financial performance in Middle Eastern countries seems to be inconclusive. For instance, empirical studies show that there is a negative relationship between government ownership and financial performance (e.g., Al-Malkawi and Pillai 2018;Alawi 2019;Zeitun and Tian 2007). However, other studies have revealed a positive relationship (e.g., Abdallah and Ismail 2017;Al-Matari et al 2017;Zeitun 2014).…”

Section: Government Ownershipmentioning

confidence: 99%

Ownership Structure and Firm Performance in the Middle East: A Meta-Analysis

Al-Janadi

2021

JRFM

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This paper applies a meta-analysis method to investigate the moderating impact of political stability on the relationship between ownership identities and firm performance in the Middle Eastern countries (i.e., the Arab World). The study collected 105 correlations from 46 previous studies with 11,999 observations in 11 Middle Eastern countries. The findings show that most ownership identities such as institutional ownership, government ownership, inside ownership, and family ownership have positive relationship with firm performance. Another interesting finding shows that in countries with political instability, the level of ownership identities such as institutional ownership, foreign ownership, and inside ownership play an important role in controlling companies, which leads to firm performance. The meta-analysis results reveal that different levels of political stability have an impact on the role of the majority shareholders. The findings provide evidence that the performance of ownership identities in the Middle Eastern countries remains effective, especially with the existence of fair protection rights and political stability.

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Section: Government Ownershipmentioning

confidence: 99%

Ownership Structure and Firm Performance in the Middle East: A Meta-Analysis

Al-Janadi

2021

JRFM

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“…However, recent papers find that the relationship is not significant. For example, Alawi (2019) found that foreign direct investment had an insignificantly positive impact on stock price volatility.…”

Section: Abnormal Foreign Investment and Stock Returnsmentioning

confidence: 99%

“…One may question whether, when the current AFI informs us about firm performance, should it also inform us about stock price changes in the near future? Literature documents the relationship between foreign investment and stock returns either positively or negatively (Berko and Clark, 1997; Alawi, 2019). We test if the AFI current quarter (AFI t ) relates to the stock returns next quarters (r t + k , k = 1,2, … n).…”

Section: Introductionmentioning

confidence: 99%

Foreign investment and the firm performance in emerging securities market: evidence from Vietnam

Nguyen,

Huynh,

Huynh

2024

JED

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PurposeThe authors investigate how foreign investment in securities market informs about the future firm performance in emerging markets.Design/methodology/approachThe authors define the independent variable, abnormal foreign investment (AFI) as the residuals of the foreign ownership equation. The authors regress foreign ownership on its first lag and factors and define the residuals as the AFI. The AFI is the over- or under-investment reflecting foreign conscious (clear-purpose) investment, thus better indicating how foreign investment affects firm performance. The dependent variable is Tobin’s q (Q), which represents the firm performance. Then, the authors regress the Tobin’s q next quarters (Qt + k) on the AFI current quarter (AFIt). The authors use a two-step generalized method of moments (GMM) and check endogeneity with the D-GMM model for the regression.FindingsThe results show that the current AFI is positively correlated with the firm performance in each of the next four quarters (the following one year). This positive relationship is pronounced for large firms, firms with no large foreign investors, liquid firms and firms listed in the active market. The results suggest that foreign investment might choose well-productive firms already. Also, the current AFI is significantly positively correlated with stock returns in each of the next three quarters. These results suggest that the AFI is informative up to one-year period.Research limitations/implicationsThe results suggest that foreign investors (most of them are small) in the Vietnamese market might choose well-productive firms already. However, if the large investors have long-term investment in tangible, intangible, human capital and so on, and lead to a significant increase in firms’ performance is still the limitation of this paper.Practical implicationsThe results of this paper may guide investors whose portfolios are composed of stocks with foreign investment.Originality/valueThis paper adds to the literature to enrich the conclusion of a positive relationship between foreign ownership and firm performance.

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“…Untuk keberhasilan pertumbuhan perusahaan, rasio ini harus besar. Kian tingginya ROA sehingga bertambah besar laba yang dihasilkan oleh perusahaan dengan demikian investor akan membeli lebih banyak saham (Alawi, 2019). Sedangkan ROE digunakan untuk menguji komponen ekuitas dari keseluruhan investasi perusahaan.…”

Section: Kajian Teoriunclassified

Pengaruh Likuiditas Terhadap Kinerja Perusahaan Pada Perusahaan Yang Terdaftar Di BEI

Dirmansyah

Syalsabila

Lestari

2022

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The purpose of this research is to conclude the impact of liquidity on firm peformace. The sample in this study are companies from food and beverages subsector listed on Indonesia Stock Exchange in 2016-2020. The sampling technique used in this study is purposive sampling and the analysis method is panel data regression. The independent variables in this study are acid ratio and current ratio, and the control variable is sales growth and firm size, with the firm performance as the dependent variable. The results show that Acid ratio has insignificant effect on ROA and ROE, Current Ratio has insignificant effect on ROA and has a negative and significant effect on ROE. Sales growth has a positive and significant effect on ROA and has an insignificant effect on ROE. Firm size has a positive and significant effect on ROA and ROE.

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Relationship between Capital Requirement, Ownership Structure, and Financial Performance in Saudi Arabian Listed Companies

Abstract: The regulators' role Ownership concentration Foreign ownership Capital requirements Return on asset (ROA) Return on equity (ROE).

Cited by 8 publications

References 46 publications

Ownership Structure and Firm Performance in the Middle East: A Meta-Analysis

Ownership Structure and Firm Performance in the Middle East: A Meta-Analysis

Foreign investment and the firm performance in emerging securities market: evidence from Vietnam

Pengaruh Likuiditas Terhadap Kinerja Perusahaan Pada Perusahaan Yang Terdaftar Di BEI

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