Corporate Governance

In: Business and Management

Submitted By nourhankhaled
Words 5092
Pages 21
The Effect of Board Size and Ownership Structure on the Financial Performance: An Empirical Study on Egypt
Nourhan K. Karkoura* Pharos University in Alexandria, Egypt

Abstract

Corporate governance can be viewed as a mechanism that ensures external investors receive proper returns on their investments. This paper investigates the effect of board size and the effect of ownership structure on firm performance in Egypt. Using a sample non- financial corporation from the most active 50 corporations listed in the stock exchange after excluding banks and financial firms for the period 2007 to 2009. This study adopts a correlational research design using secondary data from the disclosure book issued by the Egyptian stock exchange. Multiple regressions are used to determine the extent to which variations in performance of the most active corporations is explained by the board size and ownership structure. Firm financial performance is measured by return on assets, returns on equity and Tobin Q ratio, while corporate governance aspects were board size and ownership structure.

Keywords: board size, ownership structure, financial performance, and Egypt

Nourhan K. Karkoura, Graduate Teacher Assistant in Finance and Investment Department, Faculty of Financial and Administrative Sciences, Pharos University in Alexandria, Egypt, E-mail: nourhan.khaled@pua.edu.eg

1. Introduction
The importance of corporate board size and ownership structure as a mechanism of corporate governance has always been a matter of considerable academic debate in both theoretical and empirical literature. This issue has also received renewed attention among the policy makers in both developed and developing countries engaged in reforming internal corporate control system especially after the recent corporate scandals like Enron and Worldcom. Corporate governance encompasses how an…...

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