An Institutional Perspective of Corporate Governance Mechanisms in the Middle East and North Africa

This Ph.D. thesis is a cumulative dissertation of three studies that aim to contribute to the reevaluation of corporate governance mechanisms in the Middle East and North Africa (MENA), which is a relatively unexplored region in the literature despite the prevalence of unique taxonomies and institutional configurations in its markets. Following an institutional logic, this thesis underlines the substantial impact of weak institutional configurations on corporate governance mechanisms and provides a detailed understanding of the implications of government ownership on performance outcomes and internationalization strategies. It likewise highlights the effect of various institutional constellations on the appointment of females to corporate boards and the impact of the publics conservative perceptions on their actual roles. The first study examines the impact of government ownership on performance outcomes and finds that state-owned enterprises (SOEs) arise as a response to market failures and enhance firm performance by essentially overcoming and filling institutional voids in financial and legal markets. As various ownership configurations present different implications on firms outcomes, complex and lengthy ownership structures as well as foreign ownership were found to impair firms financial performance, particularly in underdeveloped institutional settings. Institutional distance, however, was found to have a crucial role in overcoming legitimacy concerns of foreign investors from within the MENA region and positively influence their impact on firm performance. The second study investigates the impact of government ownership on internationalization strategies from the MENA amid the regions perilous and hazardous institutional setting and finds that government ownership overall positively impacts internationalization prospects from the region and that this effect is particularly stronger when financial and legal markets are weak as the states capabilities in addressing institutional failures become particularly evident. High levels of corruption, political instability, and political constraints were, however, found to impair internationalization prospects by essentially increasing host countries perceptions of risk and uncertainty. The study likewise underlines the prevalence of regional institutional development and finds that firms from the MENA are more likely to internationalize within the regions boundaries due to the decreased legitimacy concerns and normative pressures that the regional isomorphism presents. The third paper explores the predictors of female board directorship and their consequent role and value to corporate boards in the MENA. Amid the regions conservative view regarding the role of females in society, the study finds that various layers of institutional conditions from firm size, state ownership, family ownership, foreign ownership, female representation at the industry level, and gender parity impact the appointment of women to corporate boards. The societal attitudes that impact female directorship likewise affect their actual performance. While women are generally valued by firms, they are subject to a biased market evaluation.

This Ph.D. thesis is a cumulative dissertation of three studies that aim to contribute to the reevaluation of corporate governance mechanisms in the Middle East and North Africa (MENA), which is a relatively unexplored region in the literature despite the prevalence of unique taxonomies and institutional configurations in its markets. Following an institutional logic, this thesis underlines the substantial impact of weak institutional configurations on corporate governance mechanisms and provides a detailed understanding of the implications of government ownership on performance outcomes and internationalization strategies. It likewise highlights the effect of various institutional constellations on the appointment of females to corporate boards and the impact of the publics conservative perceptions on their actual roles. The first study examines the impact of government ownership on performance outcomes and finds that state-owned enterprises (SOEs) arise as a response to market failures and enhance firm performance by essentially overcoming and filling institutional voids in financial and legal markets. As various ownership configurations present different implications on firms outcomes, complex and lengthy ownership structures as well as foreign ownership were found to impair firms financial performance, particularly in underdeveloped institutional settings. Institutional distance, however, was found to have a crucial role in overcoming legitimacy concerns of foreign investors from within the MENA region and positively influence their impact on firm performance. The second study investigates the impact of government ownership on internationalization strategies from the MENA amid the regions perilous and hazardous institutional setting and finds that government ownership overall positively impacts internationalization prospects from the region and that this effect is particularly stronger when financial and legal markets are weak as the states capabilities in addressing institutional failures become particularly evident. High levels of corruption, political instability, and political constraints were, however, found to impair internationalization prospects by essentially increasing host countries perceptions of risk and uncertainty. The study likewise underlines the prevalence of regional institutional development and finds that firms from the MENA are more likely to internationalize within the regions boundaries due to the decreased legitimacy concerns and normative pressures that the regional isomorphism presents. The third paper explores the predictors of female board directorship and their consequent role and value to corporate boards in the MENA. Amid the regions conservative view regarding the role of females in society, the study finds that various layers of institutional conditions from firm size, state ownership, family ownership, foreign ownership, female representation at the industry level, and gender parity impact the appointment of women to corporate boards. The societal attitudes that impact female directorship likewise affect their actual performance. While women are generally valued by firms, they are subject to a biased market evaluation.