Corporate Governance during the Financial Crisis: Evidence from the United Arab Emirates (UAE)

41 Pages Posted: 15 Aug 2018 Last revised: 27 Jan 2020

See all articles by Bakr Al-Gamrh

Bakr Al-Gamrh

ESC Rennes School of Business

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia - School of Accountancy

Redhwan Al-dhamari

Universiti Utara Malaysia

Date Written: June 22, 2018

Abstract

This study evaluates corporate governance practices of listed firms in the UAE and investigates whether corporate governance mitigates/exacerbates the impact of leverage and risk on firm performance during crisis and non-crisis times. The study constructs a corporate governance index not only to examine the dispute of the role of corporate governance during the crisis, but also its influence on other factors that fuelled the crisis. A firm-level panel data is used that spans the period 2008 to 2012 of all listed firms on ADX and DFM. The study finds a positive influence of corporate governance strength on the accounting performance, but a negative influence on the firms’ economic performance. In normal times, corporate governance mitigates the negative influence of leverage and risk on the accounting and economic firm performance. However, this synergy effect varies across performance indicators during crisis.

Keywords: Risk; Leverage; Corporate Governance Index; Firm Performance; UAE

JEL Classification: G30; G38; G39; G18; D81

Suggested Citation

Al-Gamrh, Bakr and Ku Ismail, Ku Nor Izah and Al-dhamari, Redhwan, Corporate Governance during the Financial Crisis: Evidence from the United Arab Emirates (UAE) (June 22, 2018). Applied Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3201367

Bakr Al-Gamrh (Contact Author)

ESC Rennes School of Business ( email )

Rue Robert d'arbrissel, 2
Rennes, 35000
France

Ku Nor Izah Ku Ismail

Universiti Utara Malaysia - School of Accountancy ( email )

Sintok, Kedah Darul Aman 06010
Malaysia

Redhwan Al-dhamari

Universiti Utara Malaysia ( email )

Sintok
COLGIS, UUM
Sintok, KY KEDAH DARUL 06010
Malaysia

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