The Moderating Role of CEO's Education on the effect of Corporate Governance Mechanism and Firm's Performance in Saudi Arabia's Non-Financial Sector
| dc.contributor.author | Lubna Javed | |
| dc.date.accessioned | 2026-09-18T01:56:06Z | |
| dc.date.issued | 2022 | |
| dc.description | Recent scandals at Wells Fargo and Equifax-the financial crisis of 2008 and the new millennium scandals in Enron, WorldCom, Tyco, and Qwest have put back on the policy agenda and intensified debate on the efficacy of corporate governance mechanisms as means of increasing firm performance. At the backdrop of this scenario, Saudi Arabia has lately revamped its codes for corporate governance. Empirical work in corporate governance has undergone a remarkable growth, however despite the volume of empirical evidence, there has been no consensus as to which corporate governance mechanism resolves the agent principal conflict and increase performance. Therefore, this study has addressed this problem by creating and validating corporate governance mechanisms model on 114 non-financial firms listed on the Saudi stock Exchange Tadawul spanning the period of 2015–2018. This thesis offers novel evidence detailing the impact of corporate governance mechanisms measured by board size, audit quality, and ownership concentration as the independent variable and CEO education as the moderator variable on the performance of Saudi listed firms using a contingent theoretical-based framework drawing on agency theory and upper echelon theory. Numerous alternative specifications and estimation techniques are used for analysis purpose, including system generalized methods of moments, which effectively overcomes the problem of endogeneity and pre-estimation, and post-estimation tests were conducted for the validity of the model. This thesis used positivist approach where the longitudinal/panel data is secondary and quantitative in nature which was collected from 2015-2018 that was analyzed using STATA 14. The thesis employed the balanced panel data of 114 listed non-financial firms and analyzed after controlling for potential endogeneity using a more robust methodology-a two-step system Generalized Method of Moments (GMM) framework. The results show that there is a significant impact of board size, iv ownership concentration on firm performance measured by ROE and ROA, however audit quality illustrated significant impact on firm performance when measured with ROE and no significant impact when measured by ROA. This research expands the upper echelon theory in strategic management literature by confirming that CEO’s education significantly influences governance mechanisms and firm performance. Moreover, it extends the agency theory in finance literature by recommending and validating proxies to select and measure corporate governance mechanisms (board size, ownership concentration, audit quality) that significantly mitigate the problem of agency in the contemporary business environment in 114 non-financial firms in Saudi Arabia from 2014-2018. The results show that firm performance deteriorates with board size, while performance improves with ownership concentration and audit quality. The results also indicated that CEO education moderates the relationship between board size, audit quality, ownership concentration on firm performance. The implications of this research are manifolds. First, the implementation by Saudi Arabia of the latest corporate governance regulations and IFRS adoption almost certainly impact firm performance markedly. Second, corporate governance regulations should recognize the role of more concentrated ownership in enhancing corporate performance. Third, stakeholders should apply pressure on investee firms to maintain smaller boards and maintain audit quality by employing services of big four audit firms. And lastly the board must prefer hiring CEO with good level of education preferably graduates and above. Furthermore, the study should provide policy makers with a better understanding of the corporate governance structures required to promote better performance by drawing on existing theories and the empirical modeling, in an emerging economy setting such as Saudi Arabia, a new and broader data set, thereby informing better future policy and protecting shareholders’ interests. | |
| dc.identifier.uri | https://scholarhub.unimas.my/handle/123456789/2360 | |
| dc.language.iso | English | |
| dc.publisher | UNIVERSITI MALAYSIA SARAWAK | |
| dc.relation.ispartofseries | Faculty of Economics and Business | |
| dc.subject | Corporate governance, firm performance, audit quality, ownership concentration, CEO education | |
| dc.title | The Moderating Role of CEO's Education on the effect of Corporate Governance Mechanism and Firm's Performance in Saudi Arabia's Non-Financial Sector | |
| dc.type | PhD |