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Article
Publication date: 12 August 2021

Maha Mohamed Ramadan and Mostafa Kamal Hassan

The study aimed to examine the effect of corporate governance mechanisms on the performance of Egyptian firms listed in the Egyptian Stock Exchange (EGX) between 2014 and 2016.

Abstract

Purpose

The study aimed to examine the effect of corporate governance mechanisms on the performance of Egyptian firms listed in the Egyptian Stock Exchange (EGX) between 2014 and 2016.

Design/methodology/approach

We relied on agency theory and resource dependence theory to generate testable hypotheses and capture the empirical findings. We regressed various performance measures (Return on Assets; Asset Utilization Ratio, Tobin's Q) regarding governance mechanisms (institutional ownership, managerial ownership, board size, board frequent meetings, the presence of non-executive directors and female directors) while controlling for firm size, leverage, years of listing and market share. The study uses ordinary least square (OLS) and two stages least square (2SLS) regression analysis to address the possible endogenous impact of the firms' ownership structure.

Findings

Board gender diversity, the managerial ownership and frequent board meetings positively influence the Egyptian firms' efficiency measured by assets utilization, while the institutional ownership and board size have negative effects. When using Tobin's Q, the managerial ownership shows a negative effect while institutional ownership and board size present positive effects. When using 2SLS regression, findings remained stable whereas non-executive directors showed a significant negative association with assets utilization.

Practical implications

Policy makers are recommended to draft policies related to limiting the number of board members, diluting the government's indirect ownership of firms, empowering women in boardrooms and developing the skills needed for non-executive directors.

Originality/value

To the best of our knowledge, our study is one of very few that address firms' performance after a period of political instability accompanied by a greater role for females in the boardrooms of Egypt.

Details

Journal of Accounting in Emerging Economies, vol. 12 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Open Access
Article
Publication date: 25 November 2019

Mostafa Kamal Hassan and Fathia Elleuch Lahyani

This study aims to investigate the effect of media coverage, negative media tone and the interaction between negative media tone and independent non-executive directors…

1066

Abstract

Purpose

This study aims to investigate the effect of media coverage, negative media tone and the interaction between negative media tone and independent non-executive directors (INEDs) on strategic information disclosure (SD).

Design/methodology/approach

The authors rely on media agenda-setting theory, agency theory and a panel data set of 52 UAE non-financial listed firms from 2009 to 2016. Multivariate regressions examine the effect of media coverage and negative media tone on SD and examine the moderation of INEDs on the effect of negative media tone on SD while controlling for firm size, board size, board meeting frequency, firm profitability and leverage.

Findings

The results show that negative media tone has a negative effect on SD, and there is no association between media coverage and SD. The results show that INEDs are negatively associated with SD and have a negative moderating effect on the negative media tone–SD relationship. INEDs follow a conservative approach, encouraging less SD when their firms face negative media tone.

Research limitations/implications

The authors measured media coverage and negative media tone by the number of news articles. In the robustness test, they use media tone score. They measured SD using an index that captures firm strategy dimensions. Though these measures are inherently subjective, they were used to measure variation in media coverage, media tone and SD across listed UAE non-financial firms. Mitigation of subjectivity was achieved through rigorous cross-checking measurements.

Practical implications

Findings assist UAE policymakers and the international business community with insights related to articulation of media to SD and INEDs’ role in moderating the effect of media on SD.

Originality/value

To the authors’ knowledge, this is the first study that combines media agenda-setting theory with agency theory and SD in an emerging market economy (the UAE). The study is also among the few studies that illustrate the possible role of INEDs under different media tones in emerging markets.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 10 October 2018

Mostafa Kamal Hassan, Bassam Abu Abbas and Samy Nathan Garas

This paper aims to examine the relationship between the readability of annual reports and corporate performance in Qatari listed firms while controlling for a firm’s…

1061

Abstract

Purpose

This paper aims to examine the relationship between the readability of annual reports and corporate performance in Qatari listed firms while controlling for a firm’s competitive position, governance structure and specific features such as size, age and industry type.

Design/methodology/approach

This study relies on both agency theory and legitimacy theory to develop testable hypotheses. It uses a sample of 126 firm-year listed companies in the Qatar Stock Exchange to test obfuscation in the annual reports through examining the association between the readability of Narrative Disclosures (NDs) and corporate profitability, financial risk and agency costs for the period from 2014-2016.

Findings

The findings show that firms with higher annual report readability are more profitable and have lower agency costs, which is an indication of the existence of “obfuscation.” Qatari firms may use narrative complexity as a disclosure strategy to enhance their image and consequently maintain their social legitimacy.

Research limitations/implications

Although the study findings suffer from limited global generalization, they can be generalized across Gulf Cooperation Council countries. Thus, future cross-country research is encouraged.

Practical implications

The findings encourage Qatari policymakers to instate a policy for “Plain English” writing to make NDs easy to read by international investors.

Originality/value

This study is one of very few studies that examines the readability of annual reports in emerging market economies, i.e. Qatar. The study contributes to the paucity of research that examines English-written annual reports in non-English speaking countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 24 December 2021

Mostafa Kamal Hassan, Bassam Abu-Abbas and Hany Kamel

The authors investigate the impact of disclosure tones and financial risk on the readability of annual reports in the banking sector. The authors also examine the…

Abstract

Purpose

The authors investigate the impact of disclosure tones and financial risk on the readability of annual reports in the banking sector. The authors also examine the moderating effect of banks' financial risk on the tone–readability relationship.

Design/methodology/approach

This study relies on the agency theory and the social psychology theory to formulate its testable hypotheses and explain the empirical findings. It uses a sample of 390 bank-year observations from banks listed in the Gulf Cooperation Council (GCC) Stock Exchanges during the period 2014–2019. It also employs random effect regressions to analyze the data and to examine the reverse causality/endogeneity in order to obtain robust findings.

Findings

This study’s results demonstrate that easy (difficult) to read annual reports is significantly associated with positive (negative) tone. Bank managers characterized as “too positive/optimistic” and banks with higher financial risks publish less readable annual reports. The results also show that the interaction between negative tone and a bank's financial risk is inversely associated with reading difficulty, indicating that managers prepare easy text to clarify causes of their banks’ high risks, yet they communicate this easy text with a negative tone that reflects their feelings/emotions towards the financial risks of their banks.

Practical implications

This study’s findings call for the use of a plain English text that bears a neutral tone and urge financial analysts to go beyond the financial aspects of annual reports. They also stimulate policymakers to draft policies, which ensure the presence of audit committee members who possess a broad expertise to uncover the linguistic issues embedded in the annual reports.

Originality/value

To the best of the authors' knowledge, this is the first study dedicated to exploring the tone–readability association in the GCC's banking sector.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 11 July 2016

Mostafa Kamal Hassan and Samar Mouakket

The study aims to explore the processes of implementing an enterprise resource planning (ERP) system in a public service organization operating in an emerging market…

2388

Abstract

Purpose

The study aims to explore the processes of implementing an enterprise resource planning (ERP) system in a public service organization operating in an emerging market economy, namely, the United Arab Emirates (UAE).

Design/methodology/approach

The study draws on Laughlin’s (1991) model of organizational change to highlight how the introduction of an ERP system, particularly its accounting modules, disrupted the adopting organization’s modes of thinking and its members’ practices. It uses a case study methodology. Data collection methods included semistructured interviews, documentary evidence and personal observation.

Findings

The case study findings show that despite implementation and customization problems, the organization’s employees were forced to use the ERP system. The findings also highlight how the ERP system was acted upon to mobilize the organization’s members toward a new era of information technology. However, the misfit between pre- and post-ERP system accounting practices led to some organizational members to form absorbing groups that questioned accounting-based ERP system organizational changes. The top management’s persistent desire to adopt the ERP system through forcing the organization’s employees to use the system’s modules led the organization to undergo what Laughlin (1991) calls “colonization” organizational change.

Research limitation/implications

The use of a case study methodology inherently limits the generalizability of the study’s findings. The case study was carried out over a relatively short timeframe, namely, ten months. Therefore, the use of a longitudinal case study to examine accounting-based ERP organizational change is recommended.

Practical implications

The study provides insights that can assist top management in formulating organizational change strategies. It also provides insights about emerging economies’ regulatory particularities that influence ERP system implementation.

Originality/value

The study is one of the first studies that utilizes Laughlin’s (1991) model of organizational change to examine accounting-based ERP organizational change in an emerging market economy.

Details

International Journal of Organizational Analysis, vol. 24 no. 3
Type: Research Article
ISSN: 1934-8835

Keywords

Article
Publication date: 13 September 2021

Mostafa Kamal Hassan, Mustafa Elkasih Abdulkarim and Hazem Ramadan Ismael

This study aims to investigate the association between organisational culture (OC) and the extent to which risk governance (RG) practices are implemented in Qatar.

Abstract

Purpose

This study aims to investigate the association between organisational culture (OC) and the extent to which risk governance (RG) practices are implemented in Qatar.

Design/methodology/approach

It relies on the institutional theory and OC perspectives to generate testable hypotheses and explain the empirical findings, using data from 85 Qatari firms collected based on questionnaires. It also applies ordinary least squares regression to examine the associations between five OCs (innovation, outcome orientation, attention to detail, team orientation and tight versus loose control) and the level of implementing RG practices, whilst controlling for the presence of internal audit (IA), firm size, listing status, type (private/government) and sector (financial/non-financial).

Findings

An OC of “tight control”, the presence of an IA and being a private firm are significantly associated with implementing RG practices. An OC of teamwork is negatively associated with RG practices.

Practical implications

Policymakers and corporate managers are encouraged to set guidelines governing the formation of cohesive cooperative teams within organisations. They must develop strategies that promote the “risk culture” as a major component of OC. Policymakers should also monitor the culture and institutional forces behind the successful implementation of RG that involves the collaboration of employees at different organisational levels.

Originality/value

To the best of the authors’ knowledge, this study is novel because it empirically examines the OC–RG relationship in an emerging market economy (Qatar).

Details

Journal of Accounting & Organizational Change, vol. 18 no. 1
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 18 October 2018

Mostafa Kamal Hassan and Samar Mouakket

The purpose of this paper is to explore political behaviours associated with the implementation of an enterprise resource planning (ERP) system in a public service…

Abstract

Purpose

The purpose of this paper is to explore political behaviours associated with the implementation of an enterprise resource planning (ERP) system in a public service organisation from an emerging market country, the United Arab Emirates (UAE).

Design/methodology/approach

The authors’ theoretical framework is based on the notions of trust, agent reflexivity, ontological security, routines, control and power proposed by Giddens (1984, 1990). The authors explore how the political behaviour of organisation members emanates from the introduction of an ERP system (particularly its accounting modules), and how the interaction between individual power, trust and control shaped its implementation process. The case study methodology relied on diverse data collection methods including semi-structured interviews, documentary evidence and personal observation.

Findings

The authors show that the accounting-based ERP system created an episode of discomfort in the organisation, which facilitated reflexivity and critical reflection by organisation members and led to a re-assessment of ways of thinking pre- and post-dating the implementation of the ERP system. The findings illustrate the entangled relationship between the new accounting-based ERP system and the feelings of trust emerging during organisational change.

Practical implications

Although case studies are intrinsically limited in terms of generalisability, the authors’ investigation provides practical insights into the management of the needs of trust, ontological security and sources of power experienced by organisation members, since the fulfilment of such needs is the underlying pillar which the success of ERP systems rests upon.

Originality/value

This study is one of the first to apply Giddens’ (1984, 1990) conceptualisation to examine organisation change caused by the implementation of an accounting-based ERP system in an emerging market economy.

Details

Journal of Accounting in Emerging Economies, vol. 8 no. 4
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 9 May 2016

Mohammed Shahedul Quader, Md. Mostafa Kamal and A.B.M. Enamol Hassan

This paper aims to conduct an in-depth study of any changes that small medium enterprises (SMEs) environmental performance face, in the retailing and manufacturing sector…

1284

Abstract

Purpose

This paper aims to conduct an in-depth study of any changes that small medium enterprises (SMEs) environmental performance face, in the retailing and manufacturing sector, as well as to identify their main drivers. Furthermore, it seeks to investigate SMEs’ perspectives regarding the environmental management systems and more specifically International Organisation for Standardisation (ISO) 14001 on the one side, whether it is a positive relationship between the implementation of “ISO 14001” by SMEs and their profitability of business on the other.

Design/methodology/approach

This study is a qualitative research, which combines secondary data enriched with daily articles and primary data using in-depth interviews with experts from the SME sectors, which attempts to build a sufficient “theory” by answering the research questions.

Findings

The business world has started to get widely involved with the environmental issues and even if this, in some cases, happened only for marketing purposes, it is difficult now to be changed. The SMEs have started to realise their responsibilities and act accordingly, but there is a long way to cover until their actions will be actually beneficial for the environment. However, the improvement or stability of SMEs’ environmental performance, meaning the implementation of more environmental activities, depends on the impact that those changes will have in every SME, due to the unique idiosyncrasy that each of it consists.

Originality/value

This paper reveals proper method for documenting monetary rewards to entrepreneurship through maintaining environmental issues accurately using information about profitability of SME’s. After maintaining environmental factors, the premia illustrates about the entrepreneurs concentrating not only profitability but also environmental concern.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 10 no. 2
Type: Research Article
ISSN: 1750-6204

Keywords

Article
Publication date: 31 May 2013

Mostafa Kamal Hassan and Sawsan Saadi Halbouni

The purpose of this paper is to investigate the effect of corporate governance mechanisms on the financial performance of the United Arab Emirates (UAE) listed firms.

3096

Abstract

Purpose

The purpose of this paper is to investigate the effect of corporate governance mechanisms on the financial performance of the United Arab Emirates (UAE) listed firms.

Design/methodology/approach

Relying on a sample of 95 UAE listed firms affiliated to financial and non‐financial sectors, the paper performs a cross‐section regression analysis to test whether there is a significant relationship between governance mechanisms (voluntary disclosure, CEO duality, board size, board committee and audit type) and UAE firms' performance while controlling for firm size, industry type, firm listing years and leverage. The paper relies on data published on year 2008 and utilizes the accounting‐based measures of Return on Assets (ROA), Return on Equity (ROE) as well as the market measure (Tobin's Q) in order to measure the UAE firms' financial performance.

Findings

The empirical results show that voluntary disclosure, CEO duality and board size are significantly influencing the UAE accounting‐based performance measure, while none of the governance variables significantly affects firms' market performance measure. The results also reveal that firm size is the only control variable that significantly influences firms' performance. This paper provides evidence showing that the accounting‐based performance measures are more objective in the years where unstable economic conditions exist.

Practical implications

The paper's findings indicate that the underlying principles of corporate governance are applicable in emerging markets. The findings are important to regulators, investors, managers, and researchers aiming at developing new policies that establish better regulatory infrastructure that increases investors' confidence and attracting foreign investment.

Originality/value

The paper is one of very few studies that examine the relationship between corporate governance and firms' financial performance under economic turbulent in an emerging market economy, the UAE.

Article
Publication date: 28 October 2014

Walaa Wahid ElKelish and Mostafa Kamal Hassan

The main purpose of this paper is to investigate the relationship between organizational culture and corporate risk disclosure for listed companies in the United Arab…

1309

Abstract

Purpose

The main purpose of this paper is to investigate the relationship between organizational culture and corporate risk disclosure for listed companies in the United Arab Emirates (UAE).

Design/methodology/approach

The organizational culture is represented by four dimensions: Clan, Adhocracy, Market and Hierarchy (Cameron and Quinn, 1999). Data are computed from the financial reports of all listed companies on the UAE Stock Market as of the year ending 2005. The multiple regression analysis model, ordinary least square, is used to test the study hypotheses.

Findings

Results show that the organizational culture of Hierarchy, which focuses on more formalized work procedures, has a significant positive effect on the companies’ risk disclosure in the UAE business environment. Several other control variables are implemented to ensure reliability of results.

Practical implications

Listed companies in the UAE are more responsive to formal rules and regulations on reporting risk disclosure, which is quite different from the “self-regulation” practices that are more common in some Western countries. Consequently, policymakers and regulators in the UAE, and in other countries with similar conditions, are encouraged to focus on continuous development of formal rules and procedures to enable more harmony with international best practices of risk disclosure.

Originality/value

Unlike the majority of previous empirical studies, this is the first study to incorporate a behavioral endogenous organizational culture model to explain the main determinants of risk disclosure, which opens the door for more understanding of the risk disclosure output function as a management process.

Details

International Journal of Commerce and Management, vol. 24 no. 4
Type: Research Article
ISSN: 1056-9219

Keywords

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