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Islamic financial institutions, corporate governance, and corporate risk disclosure in Gulf Cooperation Council countries

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  • Abdallah, Abed Al-Nasser
  • Hassan, Mostafa Kamal
  • McClelland, Patrick L.

Abstract

Using content analysis we evaluate the determinants of corporate risk disclosure in a sample of 424 publicly traded firms in the Gulf Cooperation Council countries. We hypothesize that corporate risk disclosure will be lower in Islamic financial institutions when compared to conventional financial institutions and higher in firms that have high quality corporate governance contexts. We also argue that corporate risk disclosure will vary across the Gulf Cooperation Council countries despite sociocultural and regulatory similarities. Results are generally supportive of our hypotheses. Implications for theory and practice are discussed.

Suggested Citation

  • Abdallah, Abed Al-Nasser & Hassan, Mostafa Kamal & McClelland, Patrick L., 2015. "Islamic financial institutions, corporate governance, and corporate risk disclosure in Gulf Cooperation Council countries," Journal of Multinational Financial Management, Elsevier, vol. 31(C), pages 63-82.
    • Handle: RePEc:eee:mulfin:v:31:y:2015:i:c:p:63-82
    DOI: 10.1016/j.mulfin.2015.02.003
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    3. Rihab Grassa & Nejia Moumen & Khaled Hussainey, 2021. "What drives risk disclosure in Islamic and conventional banks? An international comparison," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6338-6361, October.
    4. Ibrahim, Awad Elsayed Awad & Hussainey, Khaled & Nawaz, Tasawar & Ntim, Collins & Elamer, Ahmed, 2022. "A systematic literature review on risk disclosure research: State-of-the-art and future research agenda," International Review of Financial Analysis, Elsevier, vol. 82(C).
    5. Moumen, Néjia & Ben Othman, Hakim & Hussainey, Khaled, 2016. "Board structure and the informativeness of risk disclosure: Evidence from MENA emerging markets," Advances in accounting, Elsevier, vol. 35(C), pages 82-97.
    6. Khalil Abbasi Museloo & Noormohammd Toraj, 2017. "Comparison of Risk Management in Non-profit Banks and Financial Institutions versus Other Conventional Banks and Financial Institutions in Iran," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 325-329.
    7. Oubdi, Lahsen & Raghibi, Abdessamad, 2017. "An Overview on the Practice and Issues of Hedging in Islamic Finance," MPRA Paper 82646, University Library of Munich, Germany.
    8. Marina Afzal, Muhammad Danish Habib, 2018. "Corporate Governance and Earnings Management: A Model and Empirical Investigation from Karachi Stock Exchange," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 3(2), pages 51-67, October.
    9. Akbarian , Saber & Anvary Rostamy , Ali Asghar & Rezaei , Nader & Abdi , Rasool, 2019. "Corporate Governance and Credit Risk in Iranian Banking Industry," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 14(1), pages 85-100, January.
    10. Rihab Grassa & Nejia Moumen & M. Kabir Hassan & Khaled Hussainey, 2022. "Market discipline and capital buffers in Islamic and conventional banks in the MENA region," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 139-167, March.
    11. Faizah Alsulami, 2024. "The Operational Risk Disclosure Threshold Effect in the Earnings Management–Sustainability Firm Performance Nexus in Saudi Arabia: A Dynamic Panel Threshold Regression Model," Sustainability, MDPI, vol. 16(10), pages 1-21, May.
    12. Bukola, Daniels, 2021. "Challenges and Prospects of Genetic Modified Products Under NBMAAct," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(2), pages 77-85, July - Se.
    13. Elamer, Ahmed A. & Ntim, Collins G. & Abdou, Hussein A. & Pyke, Chris, 2020. "Sharia supervisory boards, governance structures and operational risk disclosures: Evidence from Islamic banks in MENA countries," Global Finance Journal, Elsevier, vol. 46(C).
    14. Ahmed A. Elamer & Collins G. Ntim & Hussein A. Abdou & Andrews Owusu & Mohamed Elmagrhi & Awad Elsayed Awad Ibrahim, 2021. "Are bank risk disclosures informative? Evidence from debt markets," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1270-1298, January.
    15. Grassa, Rihab & Moumen, Nejia & Hussainey, Khaled, 2020. "Is bank creditworthiness associated with risk disclosure behavior? Evidence from Islamic and conventional banks in emerging countries," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    16. Naz, Iram & Shah, Syed Muhammad Amir & Kutan, Ali M., 2017. "Do managers of sharia-compliant firms have distinctive financial styles?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 174-187.
    17. Salem, Rami & Usman, Muhammad & Ezeani, Ernest, 2021. "Loan loss provisions and audit quality: Evidence from MENA Islamic and conventional banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 79(C), pages 345-359.
    18. M. Nneka, NWALA, & S. M, AZA, & Mohammed Itopa, ABDULLAHI,, 2021. "Effect of Board Attributes on Credit Risk of Listed Deposit Money Banks in Nigeria," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(2), pages 154-172, July - Se.
    19. Jia, Jing & Li, Zhongtian, 2022. "Risk management committees and readability of risk management disclosure," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(3).
    20. Hydzulkifli Hashim Omar* & Abubakar Yusuf Sanyinna, 2018. "Administrative Challenges of WAQF Institution in the Contemporary World: Future Prospects," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 294-299:6.
    21. Neifar, Souhir & Jarboui, Anis, 2018. "Corporate governance and operational risk voluntary disclosure: Evidence from Islamic banks," Research in International Business and Finance, Elsevier, vol. 46(C), pages 43-54.
    22. Raouf, Hajar & Ahmed, Habib, 2022. "Risk governance and financial stability: A comparative study of conventional and Islamic banks in the GCC," Global Finance Journal, Elsevier, vol. 52(C).

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    More about this item

    Keywords

    Corporate risk disclosure; Islamic/non-Islamic financial institutions; Corporate governance; Disclosure; Corporate communication;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • F3 - International Economics - - International Finance

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