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Article
Publication date: 8 May 2017

Khalid Al-Amri, Saif Al Shidi, Munther Al Busaidi and Serkan Akguc

The purpose of this paper is to examine the use of real earnings management by private and public firms in a unique institutional setting, which is the Gulf Cooperation…

Abstract

Purpose

The purpose of this paper is to examine the use of real earnings management by private and public firms in a unique institutional setting, which is the Gulf Cooperation Council (GCC) countries. The paper also compares the level of real earnings management between public and private firms in the GCC area.

Design/methodology/approach

The GCC area is a unique setting to investigate the use of real earnings management because of the low enforcement of reporting standards and supervisory rules, lack of sophisticated financial analysis, specialized media tools and high concentration of capital ownership. The authors use different models of real earnings management proposed by Roychowdhury, 2006, cash flow management, productions cost management and discretionary expenses management to examine the use of real earnings management.

Findings

The paper documents evidence consistent with private and public firms using real earnings management to influence their earnings figures. The paper also shows that the level of real earnings management is higher for private firms compared to public firms when cash flow management and discretionary expenses management models are used. The production cost model results show evidence consistent with public firms only engaging in real earnings management through production cost reduction.

Research limitations/implications

The results of this study might not be applicable to other emerging markets.

Practical implications

The findings of this study should promote a general understanding of firms’ behavior in unique environment such as GCC countries. Regulators in the GCC region should be aware that real earnings management techniques have been used by firms and that extra caution is required when auditing or analyzing the financial information of private and public firms in the GCC market.

Originality/value

This paper contributes to the literature in many aspects. First, it provides additional evidence on the use of earnings management in unique market contexts outside the USA and Europe. The GCC markets share many common characteristics that make them interesting settings to be investigated. Second, this paper adds more evidence on the use of earnings management between public and private firms. In this regard, the paper adds additional evidence in the discussions proposed by Ball and Shivakumar (2005) and Givoly et al. (2010) who use two competing perspectives to investigate earnings quality in public and private firms: the demand hypothesis and the opportunistic behavior hypothesis.

Details

Journal of Applied Accounting Research, vol. 18 no. 2
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 25 August 2021

Md Abubakar Siddique, Haitham Nobanee, Osama Fayez Atayah and Mohammed Khereldin Bayzid

The purpose of this paper is to measure anti-money laundering (AML) and counter-terrorism financing (CTF) disclosures by money exchanger providers in the Gulf Cooperation…

Abstract

Purpose

The purpose of this paper is to measure anti-money laundering (AML) and counter-terrorism financing (CTF) disclosures by money exchanger providers in the Gulf Cooperation Council (GCC) countries.

Design/methodology/approach

The authors conduct a content analysis on firms’ websites to compare their AML/CTF disclosure against the recommendations of the Financial Action Task Force (FATF). The authors use a one-sample t-test to examine the degree of these disclosures.

Findings

Overall, money exchange providers in GCC countries do not demonstrate a high degree of AML/CTF disclosure (20.27%). Country-wise disclosure levels are: Qatar 31%, UAE 19%, Kuwait 17.1%, Oman 26.27%, Bahrain 23.27% and KSA 6.1%.

Research limitations/implications

The study contributes immensely to understanding the disclosure behavior of this sector. It also helps in assessing their compliance with FATF recommendations.

Practical implications

The results show poor AML/CTF disclosure and compliance by money exchange providers, which should lead to increased regulations by policymakers and more disclosure by practitioners.

Social implications

Money laundering (ML) and terrorism financing (TF) can adversely affect societies. This study should help regulators to identify vulnerable areas in ML and TF activities, compare disclosures by companies in their countries with those of other countries and identify areas for improvement.

Originality/value

The study is a novel attempt. No study has been undertaken before to investigate AML and CTF disclosure by money exchange providers either globally, regionally or in any country.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 10 August 2015

Khalid Al-Amri

The purpose of this paper is to analyze the performance of the Takaful insurance firms in the Gulf Cooperation Council (GCC) countries and do a relative analysis for its…

Abstract

Purpose

The purpose of this paper is to analyze the performance of the Takaful insurance firms in the Gulf Cooperation Council (GCC) countries and do a relative analysis for its different units.

Design/methodology/approach

This paper analyzes the technical, pure technical, cost and allocative efficiency of Takaful firms in the GCC countries using data envelopment analysis (DEA) methodology.

Findings

The Takaful insurance industry in GCC is highly technical and pure technical efficient. However, it is moderately cost efficient, and there is a large opportunity for improvement. UAE and Qatar score the highest technical efficiency, while Saudi Arabia and UAE are the most cost efficient among the GCC countries.

Originality/value

The primary contribution of this paper is to provide the first DEA analysis of the Takaful industry in the GCC countries. To the best of the author’s knowledge, this is the first study on the Takaful insurance industry that uses different types of efficiency measures, namely technical, pure technical, allocative and cost efficiency, in the GCC countries. This paper also contributes in the literature of the inputs and outputs selection for the Takaful insurance efficiency calculation.

Details

Humanomics, vol. 31 no. 3
Type: Research Article
ISSN: 0828-8666

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Article
Publication date: 19 March 2021

Hong Wu

This paper aims to examine if the market risk premiums of the Gulf Cooperation Council (GCC) countries are particularly higher on prescheduled US monetary policy…

Abstract

Purpose

This paper aims to examine if the market risk premiums of the Gulf Cooperation Council (GCC) countries are particularly higher on prescheduled US monetary policy announcement days. The findings shed light on the causality relationship from the state of the global economy to the GCC equity markets as well as their integration with the rest of the world.

Design/methodology/approach

The author takes the standard event-study approach, following Fama et al. (1969). As the announcement days are prescheduled, the impact of the announcements on the GCC markets' risk premia allows for test of causality, while other studies address predictability and association.

Findings

The author finds that excess returns are higher, both economically and statistically, on announcement days in most individual GCC countries and the region overall. Moreover, additional compensations may not appear on the exact days of announcement in a few countries; rather, on the days right before or after announcements, possibly due to information leakage or gradual diffusion. My results show that there is a causal relationship from the state of the global economy to the GCC equity markets' risk premia. This new evidence supports integration between the Gulf region's and the world's financial markets.

Practical implications

The evidence of risk–return transmission from US monetary policy announcements to GCC countries' equity indices supports integration between the region's and the world's financial markets. The study results will help guide investors' and corporations' investing, capital budgeting and portfolio evaluation decisions.

Originality/value

This paper extends the announcement literature (Savor and Wilson 2013, 2014) by examining the responses of the GCC countries, the major players of the global oil markets. The empirical analysis documents a causal relationship from the state of the global economy, as revealed by US monetary policy announcements, to the GCC equity indices. This new evidence supports increased integration between the Gulf region and the world, a finding that investors and corporations should consider when making investing, capital budgeting and portfolio evaluation decisions.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 14 November 2016

Mahfoudh Abdulkarem Al-Musali and Ku Nor Izah Ku Ismail

The purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC…

Abstract

Purpose

The purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC has an impact on financial performance as well as to identify the IC components that may be the drivers of the traditional indicators of bank success.

Design/methodology/approach

The empirical data are drawn from banks’ annual reports over the three-year period of 2008 to 2010. Ordinary least squares regression analysis is constructed to examine the relationships between IC and the banks’ financial performance indicators. Pulic’s value-added intellectual coefficient method (VAIC) is applied to measure IC performance.

Findings

Empirical findings, after controlling for bank size and global financial crisis, indicate that IC is positively associated with bank financial performance indicators in all GCC countries. However, when VAIC is split into its three components, the relationships between these components and bank financial performance indicators are varied.

Research limitations/implications

The main limitation of this study is the use of IC measurement model. Its basic advantage (simplicity and ease of use) is also its main limitation. The main problem is measuring the contribution of something which is not physical and cannot be easily quantified. The key issue is that the value created by IC is indirect. However, at present, no perfect solution is available for intellectual capital measurement, as the area is still exploring the best possible solutions.

Practical implications

The results may extend the understanding of the role of IC in banking sector in GCC region and may give inputs to managers of GCC banks to structure relevant strategies to obtain, utilize, develop and retain IC. The findings also could help policy makers in GCC to formulate and implement policies for establishing a resilient banking sector.

Originality/value

This study adds to the literature by extending the knowledge of IC performance and its utilization for increasing the financial performance of GCC banks. There has only been one previous empirical study that explores the IC and its relationship with the traditional measures of bank performance in GCC region (only in Bahrain). It is the first comparative study across GCC countries.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 9 no. 4
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 21 June 2013

Haris Doukas, Alexandros Flamos, Vangelis Marinakis and Mohsen Assadi

The paper aims to provide the prospects and challenges of cooperation concerning natural gas (NG) resources between the European Union (EU) and Gulf Cooperation Council …

Abstract

Purpose

The paper aims to provide the prospects and challenges of cooperation concerning natural gas (NG) resources between the European Union (EU) and Gulf Cooperation Council (GCC), based on a “critical review” of the current state of the GCC region regarding NG production, consumption, trading movements, policy framework and existing/planned projects and programs for each GCC country individually.

Design/methodology/approach

The methodological four‐steps approach adopted is based on the context of the project “Creation and Operation of an EU‐GCC Clean Energy Network” (www.eugcc‐cleanergy.net). This paper summarizes the dynamic NG supply/demand situation in the GCC countries in a structured way, touching upon some pertinent policy issues and relating specific projects.

Findings

The key finding of the paper is the assessment of GCC countries' potential for future collaboration, especially with the EU. The collaboration opportunities, based on a detailed overview of existing and planned practices in the GCC countries, linking the policy to the practical commercial level, as well as the national system context is elaborated.

Originality/value

To the best of their knowledge, a study focused on the EU‐GCC cooperation for NG is not present in the literature. This study highlights how policy measures differ depending on the supply/demand situation of a particular country, bringing a unique perspective on how diverse the GCC region really is. Moreover, based on the specific energy projects presented, the policy level is linked to the practical commercial level. The presented approach and the related outcomes support the policy makers to enable the environment needed for concrete NG cooperation actions of mutual benefit for both regions.

Details

International Journal of Energy Sector Management, vol. 7 no. 2
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 1 June 2004

Norah Abdul Rahman Al‐yousef

The paper’s objective is to empirically invistigate whether monetary policy in GCC counties is integrarted and/or affected by monetary policy of the industrialized…

Abstract

The paper’s objective is to empirically invistigate whether monetary policy in GCC counties is integrarted and/or affected by monetary policy of the industrialized countries. To this end, the study tests possible cointegration and Granger‐causality between real interest rates of two GCC countries, namely Saudi Arabia and Bahrain, and two industrialized countries, USA and Japan. The econometric methodolgy is based on the Johansen (1998) cointegration technique and on Dolado and Kuthepohi (1996) who used Tode and Yamamoto (1995) Wald test for Granger non‐causality in integrated and cointegrated systems. The Wald test value is obtained by using Seemingly Unrelated Regressions. The empirical results of the paper show that the monetary system of Saudi Arabia is well integrated and influenced by economic indicators of the US, while neither the US nor the Japanese monetary systems have a great influence on the financial market of Bahrain.

Details

Journal of Economic and Administrative Sciences, vol. 20 no. 1
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 3 January 2018

Samy Garas and Suzanna ElMassah

The purpose of this study is to explore the impact of corporate governance (CG) on the corporate social responsibility (CSR) disclosures. This is done in the context of…

Abstract

Purpose

The purpose of this study is to explore the impact of corporate governance (CG) on the corporate social responsibility (CSR) disclosures. This is done in the context of firms operating in the Gulf Cooperation Council (GCC) countries and is largely based on the legitimacy theory, although other theories such as principal–agent theory and stakeholder theory are disucssed.

Design/methodology/approach

This study used the annual reports of 147 firms in the GCC countries, drawing on a legitimacy theory framework to determine the impact of CG characteristics, such as management ownership, ownership concentration, independence of board members, duality of CEO and chairman positions and the existence of an audit committee, on firms’ CSR disclosures to various stakeholders. Accordingly, the authors developed five hypotheses to examine the above variables and used a data set from Hawkamah – the Institute of Corporate Governance. This study covers a period of six years (2007-2012). The data set had been regressed in a multi-variate regression analysis.

Findings

The authors reported that greater managerial ownership and concentration of ownership have positive impact on CSR disclosures. The findings of this study also show that internal CG mechanisms, such as the independence of board members, the separation of powers, between the CEO and chairman positions and the existence of an independent audit committee, also have a positive influence on CSR disclosures. In addition, the leverage ratio, return on assets, company’s size and age emerge as important determinants of CSR disclosures; nevertheless, the company’s size and age are statistically not significant. These significant findings corroborate the recent concern with CG in developing countries that brings greater attention to CSR disclousures, as both internal and external CG mechanisms are effective in influencing the CSR practices.

Practical implications

This study fills the gap in literature by providing empirical evidence on the impact of CG on CSR disclosures in a significant region in the emerging economies. Furthermore, it alerts regulators, policy-makers, practitioners and firms’ executives in the GCC region and other developing countries to pay more attention to CG reforms and enforcement as well as to increase institutional pressures regarding CSR adaptation.

Originality/value

The study on how CG and CSR disclosures are connected has been limited. This study addresses this research gap and focuses on a region that has often been overlooked by accounting research.

Details

critical perspectives on international business, vol. 14 no. 1
Type: Research Article
ISSN: 1742-2043

Keywords

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Article
Publication date: 11 March 2019

Meiaad Rashid Alsaadi, Syed Zamberi Ahmad and Matloub Hussain

The purpose of the study is to provide a concrete, integrated plan to improve the service quality of mobile government (m-government) services from the customer…

Abstract

Purpose

The purpose of the study is to provide a concrete, integrated plan to improve the service quality of mobile government (m-government) services from the customer perspective in the Gulf Cooperation Council.

Design/methodology/approach

A quantitative approach was used to analyze a case study of the UAE Ministry of Interior (MOI) mobile application and a competitor: the MOI application of the Kingdom of Saudi Arabia. Data were collected using a focus group.

Findings

Results show that the technical requirement “real time” has the highest priority for deployment and “tangible service” has the lowest priority.

Research limitations/implications

Findings are limited to m-government services. Further studies could explore other government services such as traditional face-to-face services.

Practical implications

Results imply that if government decision-makers or software developers aim to understand customer requirements and improve their mobile services accordingly, the quality-function-deployment (QFD) approach is much more effective than traditional approaches in which decisions regarding services are prioritized based on the decision-makers or software developers’ perspectives.

Originality/value

Many previous studies have applied QFD for developing products based on customer needs. This, however, is one of the few studies to successfully apply the QFD matrix to m-government services.

Details

Journal of Systems and Information Technology, vol. 21 no. 1
Type: Research Article
ISSN: 1328-7265

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Article
Publication date: 14 November 2016

Terki N. Alazmi

This paper aims to investigate the contextual dimensions that form leadership behaviour amongst Kuwait’s private sector leaders.

Abstract

Purpose

This paper aims to investigate the contextual dimensions that form leadership behaviour amongst Kuwait’s private sector leaders.

Design/methodology/approach

Using a constructionist approach within which 40 leaders from Kuwaiti private sector organisations were interviewed, in the banking, investment, real estate and services sectors, this paper focuses on two main areas of study: to critically examine the literature and identify the most contextual dimensions found to have significant influence on leadership behaviour and to verify first-hand how the identified dimensions are affecting leaders’ behaviour in the specified context.

Findings

The research finds that although the content of leadership may not change significantly, the context of leadership is important and is able to alter the quality and behaviour of leaders.

Originality/value

Empirically based knowledge about leadership in context is limited, as few studies to date have examined the importance of the contextual dimensions in explaining leadership behaviour.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 9 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

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