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The moderating effects of governance on the relationship between investment opportunites, leverage and ownership indentity with firm performance in the UAE

Gamrh, Bakr Ali Ali Al (2015) The moderating effects of governance on the relationship between investment opportunites, leverage and ownership indentity with firm performance in the UAE. PhD. thesis, Universiti Utara Malaysia.

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Abstract

This study evaluates corporate governance practices of listed firms in the UAE and examines the hypothesized influence of investment opportunities, leverage, foreign and institutional ownership on firm performance. Corporate governance strength is also investigated as a moderator between investment opportunities, leverage, foreign, institutional ownership and firm performance. The moderating impact of corporate governance strength is also examined during the global financial crisis. After constructing an index to measure corporate governance strength, the fixed effects regression in panel data was used to analyze the data. The data included 101 firms with a total of 501 firm-year observations that spanned the period 2008 to 2012, of all the firms listed on the Abu Dhabi Stock Exchange and the Dubai Financial Market. The results show a significant influence of investment opportunities, leverage and institutional ownership on firm performance represented by Return on Assets (ROA) and Refined Economic Value Added (REVA). However, the results find no influence of foreign ownership on ROA, and a negative influence on REVA. The governance index shows a dramatic improvement in the corporate governance practices over time. In addition, corporate governance strength is found to significantly moderate the relationship between investment opportunities, leverage, foreign and institutional ownership with ROA, but only moderates the relationship between leverage and REVA. During the crisis, corporate governance strength appears to play a more efficient moderating role. The findings of this study provide some insights to the regulators and other related parties about the status of corporate governance practices in the UAE and show that good corporate governance is indirectly able to improve the performance of firms during different time periods.

Item Type: Thesis (PhD.)
Uncontrolled Keywords: Corporate governance, firm performance, the UAE, the financial crisis
Subjects: H Social Sciences > HG Finance
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User: Mr. Badrulsaman Hamid
Date Deposited: 11 Jan 2016 07:03
Last Modified: 12 Apr 2016 06:26
URI: http://etd.uum.edu.my/id/eprint/5413

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