The Influence of Institutional and Government Ownership on Firm Performance: Evidence from Kuwait

Abstract

Drawing on prior theoretical and empirical research examining corporate governance mechanisms, this study empirically explores the effects of institutional and government ownership on the performance of firms listed on the Kuwait Stock Exchange (KSE). Both a market-based measure (Tobin's Q) and an accounting-based measure (ROA) are used to measures firm performance. Based on a sample of 134 firms listed on the KSE in the year 2010, regression analysis results show a positive relationship between institutional investors and KSE firm performance, suggesting the powerful and influential role institutional investors play as a corporate governance mechanism. In contrast, a negative relationship is observed between government ownership and KSE firm performance, implying worse market performance when government ownership exists. The findings imply that different types of ownership structures have different affects on firm performance. Some ownership structures enhance performance while others worsen performance. [ABSTRACT FROM AUTHOR] Copyright of International Business Research is the property of Canadian Center of Science & Education and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)