The Relationship between Egyptian Economic Reform, Corporate Governance, Firm Ownership and Firm's Value: An Empirical Study

نوع المستند : المقالة الأصلية

المؤلف

Faculty of Commerce, Tanta University

المستخلص

This paper aims at filling prior literature gaps by empirically investigating the relationship between firm’s political-economic context, corporate ownership and corporate governance; and firm’s value and its affairs in Egypt as one of developing countries that has been faced rapid political and economic reform.  The paper adopts interpretive approach and interviews fourth participants including: company executives; financial analysts; and stock exchange regulators to inform our understanding of the influence of the Egyptian economic reform on firm’s value and affairs. The results show that the economic reform resulted in increased institutional ownership that is capable of better monitoring and governing managerial behaviour and decisions and hence it has become one of the important mechanisms in Egyptian corporate governance. This, in turn results in improvements in company’s operational performance, long-term profitability, management reputation, competitive position, market share, financial position, growth rate, and quality of financial reports. All, in turn, have positive impact not only on firm’s value and its survival, but also succeeding economic transition and flourishing the entire economy.   This paper contributes to literature by: highlighting the mutual interaction between economic enterprises and their context in where they operate; providing insights into how the quality of financial reports can vary according to ownership structure; documenting there is no “one-size-fits-all” corporate governance approach which can be generalised worldwide; concluding the positive role of institutional shareholders in Egyptian firms and Egyptian economy; revealing that exercising corporate governance by institutional shareholding matters in emerging markets because of lack of other governance practices; and initiative in the use of interpretive methodology and drawing on new institutional sociology (NIS) theory.

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