Does government ownership affect corporate governance and corporate disclosure? Evidence from Saudi Arabia
Abstract
Purpose
This paper aims to examine the moderating effect of government ownership (GO) on the association between corporate governance (CG) and voluntary disclosure (VD).
Design/methodology/approach
This study used multivariate analysis to examine the moderating variable.
Findings
GO has a moderating negative effect on the association between CG factors [e.g. board size, non-executive directors (NEDs)] and VD, which indicates that GO plays a negative role in the effectiveness of CG. The study also found that audit quality is not affected by the influence of GO, indicating that companies without GO are better than companies with GO in terms of applying the best practices of CG to provide sufficient and high-quality disclosure.
Originality/value
This study has important implications for governments to be more effective in implementing the best practices of CG. Additionally, the findings could have implications for authority regulators, policy makers and shareholders to require effective implications for CG to reduce the effects of GO the implementation of best CG practices and the disclosure of quality information.
Keywords
Acknowledgements
The authors would like to thank the anonymous referee and the participants of the American Accounting Association (AAA) – GNB Midyear Conference 2015 in Detroit, USA, for their helpful comments. The authors also gratefully acknowledge the valuable comments and suggestions of the two anonymous reviewers and editors in the previous versions of this manuscript.
Citation
Al-Janadi, Y., Abdul Rahman, R. and Alazzani, A. (2016), "Does government ownership affect corporate governance and corporate disclosure? Evidence from Saudi Arabia", Managerial Auditing Journal, Vol. 31 No. 8/9, pp. 871-890. https://doi.org/10.1108/MAJ-12-2015-1287
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited