Kuwait-University-Journal-of-Law-header
Search
Journal of Law

Previous Issues

Advance Search
Year : From To Vol
Issue Discipline:
Author

Volume :22 Issue : 87 1997      Add To Cart                                                                    Download

PUBLIC OWNERSHIP, SIZE AND PERFORMANCE OF THE SAUDI SHARES COMPANIES: AN ECONOMETRIC STUDY

Auther : By: Dr. Ali Zawi Diabi and Dr. Elmorsy Elsaid Hegazi

 
 

This study attempted to investigate both the public ownership and the size effects on firm performance in Saudi Arabia.  The weighted lease squares method and factor analysis were used to statistically ascertain these effects.

The dummy variable technique helped also in capturing any sectoral difference of both effects.  The empirical findings reveal that the public ownership and the size effects on performance as measured by earning per share, appear positive and statistically significant.  However, when performance is measured by the asset turnover ratio, the results are mixed.  In other words, the public ownership effect and the size effect are respectively negative and positive.  At last, when the liquidity ratio is used instead, the public ownership effect on performance vanishes completely.

At the sectoral level, the banking, agricultural and service sectors affect positively performance as proxied by earning per share. However, when performance is measured by the asset turnover, only the agricultural sector exhibits this effect.  It is also noteworthy that the results from factor analysis corroborate the negative public ownership effect in the electricity sector.  On the basis of the interactive effects, it appears that only the industrial sector influences positively performance through both public ownership and size.  However, the electricity sector has a negative impact on performance through public ownership.  At last, the agricultural and service sectors influence positively performance as measured by the asset turnover through size only.

The policy implications of the study’s results are threefold.  First, to improve the performance of the electricity sector, a proper privatization strategy needs to be designed.  Second, ownership in the industrial sector needs to be maintained.  Finally, there are prospects for the economies of scale in the industrial sector which if well exploited can contribute to performance improvement.

Journal of Law
Journal of Law

You are Visitor No.

76419

Journal of Law
Journal of Law
Tell your friendsJournal of Law
Journal of Law

Last Updated

May 18, 2017

Journal of Law
Journal of Law
Journal of Law

Please enter your email Here to receive our news

Journal of Law