OWNERSHIP STRUCTURE, AUDIT QUALITY AND FIRM PERFORMANCE MODERATING AND DIRECT-EFFECT MODELS: AN EMPIRICAL STUDY

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Abstract

This paper had two main objectives, with the first being to examine the direct impact of concentration and managerial ownership on firm performance (ROA) among non-financial firms in Oman for the years 2010 until 2014. Secondly, this paper aimed to examine the moderating impact of audit quality on the ownership concentration, managerial ownership-firm performance relationship of the same sample. The study made use of leverage as the control variable. Moreover, in order to test the direct relationship between independent variables and dependent variable, this study used OLS regression. Aside from this, the study focused on the non-financial sector owing to the distinction between the structure and regulations between the two sectors (financial and non-financial sector) for the years 2012-2014. More importantly, this study revealed that the ownership concentration has a positive and significant effect on ROA. In the same path, the managerial ownership has a positive but insignificant association with ROA. Moreover, the study failed to find a moderating effect of the audit quality on the relationship between ownership concentration and managerial ownership, and firm performance of Omani companies. Lastly, the study listed and discussed the study limitations and recommendations for future studies.

Keywords: Ownership Concentration, Managerial Ownership, Firm Performance, Audit Quality

JEL Classification: G31, M42, L25

Received: 01.09.2016

Accepted: 26.10.2016

How to cite this paper: Al-Matari, E. M., Al-Matari, Y. A., & Mohammed, S. A. S. (2017). Ownership structure, audit quality and firm performance moderating and direct-effect models: An empirical study. Corporate Board: role, duties and composition, 13(1), 28-35. https://doi.org/10.22495/cbv13i1p3