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Volume :20 Issue : 2 2013      Add To Cart                                                                    Download

The Effect of Corporate Governance on the Financial and Operational Performance, and its Effect on Stock Performance in the Kuwait Stock Exchange

Auther : Allam M. Hamdan
Abd al Muttaleb M. Al-sartawi
Raed J. Jaber

The study consist of two sections, the first one is the descriptive study which inspects to which extent corporate governance is applied in Kuwaiti corporations, and how they differ in that aspect. The second section is the applied study, which aims at studying the effect of corporate governance in improving the financial and operational performance and stock performance, in addition to studying this relationship when the corporations differ in size, activity, and financial leverage. The study sample contained 96.5 percent of Kuwaiti corporations listed in Kuwait Stock Exchange; 222 corporations across 9 economic sectors. The descriptive study results showed that there is an average application which was statically significant to the corporate governance conditions in the Kuwait Stock Exchange, and there was no difference between Kuwaiti corporations in applying corporate governance conditions. The applied study showed that corporate governance affected only the market value added in the financial indexes, as well as all operational indexes. Corporate governance did not have any effect on return on investment as an index of financial performance, and earnings per share as an index of stock performance. The study did not find any effect of corporate governance based on difference in corporations' sizes, activities, or financial leverage, but it found one effect on the market value added due to the corporation's size. The study recommended that a guide and indicator be developed for measuring corporate governance in the Kuwait Stock Exchange, and there should be control on applying its conditions by the supervisory authorities.

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Nov 19, 2019

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