IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v10y2023i1p2156141.html
   My bibliography  Save this article

Corporate risk-taking and national governance quality: Empirical evidence from MENA emerging markets

Author

Listed:
  • Hamza Almustafa
  • Ploypailin Kijkasiwat
  • Ammar Jreisat
  • Somar Al-Mohamad
  • Audil Rashid Khaki

Abstract

Motivated by agency theory, this study seeks to understand the effect of the country-level national governance system on the extent of corporate risk-taking in the MENA region. The study employs a two-step generalized method of moments (GMM) approach to evaluate the influence of governance indicators on the firms’ risk-taking behavior in 459 non-financial firms listed in eight emerging capital markets in the MENA markets (Iraq, Algeria, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) region from 2010 to 2019. The results suggest that countries with better national governance systems tend to incentivize businesses to undertake risky activities and projects, particularly due to low levels of government predation and efficient resource allocation. The results also imply that the economies with stronger governance policies and systems tend to have relatively stable macroeconomic environments and less uncertainty in the government policies, and therefore, the managers are motivated to undertake projects with higher risk-return metrics with a considerable potential to contribute to the country’s economic growth.

Suggested Citation

  • Hamza Almustafa & Ploypailin Kijkasiwat & Ammar Jreisat & Somar Al-Mohamad & Audil Rashid Khaki, 2023. "Corporate risk-taking and national governance quality: Empirical evidence from MENA emerging markets," Cogent Business & Management, Taylor & Francis Journals, vol. 10(1), pages 2156141-215, December.
    • Handle: RePEc:taf:oabmxx:v:10:y:2023:i:1:p:2156141
    DOI: 10.1080/23311975.2022.2156141
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2022.2156141
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23311975.2022.2156141?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emmanuel Mensah & Peter Ackah & Mamdouh Abdulaziz Saleh Al-Faryan, 2024. "Firms growth opportunities and accruals earnings management nexus: does corporate and national governance systems play a role?," SN Business & Economics, Springer, vol. 4(10), pages 1-41, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oabmxx:v:10:y:2023:i:1:p:2156141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.