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Ahmed S. Alanazi


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The paper investigates the link between corporate governance scores and firm performance among the largest 90 listed companies on the Saudi Stock market. The sample of 90 listed firms is split into two samples: firms with high governance scores and firms with low governance scores. The research compares and contrasts the operating performance of the two samples. In addition, regression models are used to test the link between governance scores and performance. No link between the companies’ corporate governance scores and operating performance is found. It is difficult to capture all elements of the complex corporate governance topic in corporate governance scores. It seems that corporate governance in emerging markets lags far behind that of developed markets. This is the first paper to examine the link between corporate governance scores and operating performance in the Saudi market, a new emerging market that has not been examined. The paper adds to the debate in the literature whether there is a link between corporate governance scores and performance. The evidence in the literature is inconclusive.

Keywords: Corporate Governance, Governance Index, Emerging Market, Firm Performance

Received: 17.12.2018
Accepted: 30.01.2019
Published online: 07.02.2019

JEL Classification: G3, G30, G34

How to cite this paper: Alanazi, A. S. (2019). Corporate governance and firm performance: Evidence from an emerging market. Risk Governance and Control: Financial Markets & Institutions, 9(1), 45-52.