The impact of corporate ownership structure on corporate risk disclosure: Evidence from the Kingdom of Saudi Arabia

Business and Economic Horizons Pub Date : 2019-01-01 DOI:10.22004/AG.ECON.301151

O. Habtoor, Waddah Kamal Hassan, Khaled Salmen Aljaaidi

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引用次数: 7

Abstract

Understanding the role of corporate ownership structure on corporate disclosure allows an assessment of its current effectiveness and opportunities for potential improvements. Prior research on the determinants of corporate risk disclosure (CRD) has basically focused on firm-specific characteristics and corporate governance characteristics and has largely ignored the potential role of ownership structure on CRD. To the best of the authors’ knowledge, there is no study has yet extensively investigated the effect of ownership structure on the level of CRD in Saudi Arabia. This study examines the influence of different types of ownership on CRD in a developing country with high ownership concentration and unique institutional setting, namely the Kingdom of Saudi Arabia. The study uses panel data analysis of the annual reports of Saudi listed companies over a period of four years. The findings show a strong impact of ownership structure on CRD. However, the extent and direction of this influence depend on the type of ownership. Companies with higher royal ownership and government ownership disclose more risk-related information. By contrast, companies with higher family ownership and institutional ownership tend to disclose less risk-related information. However, executive directors’ ownership and non-executive directors’ ownership have no impact on CRD. The results suggest that not all controlling families have the same characteristics and motivations towards CRD practice. Overall, the results confirm the essential role of ownership structure to influence the agency conflicts through increase (decrease) CRD. The results of this study support the use of different theories to better explain the phenomenon of CRD. The study has important implications for policymakers, regulatory authorities, and practitioners in Saudi Arabia and developing countries to improve CRD practices and optimize ownership structure.

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公司股权结构对公司风险披露的影响:来自沙特阿拉伯王国的证据

了解公司所有权结构对公司信息披露的作用，有助于评估其目前的有效性和潜在改进的机会。以往关于公司风险披露决定因素的研究基本上集中在公司特征和公司治理特征上，很大程度上忽略了股权结构对公司风险披露的潜在影响。据作者所知，目前还没有研究广泛调查了沙特阿拉伯所有权结构对CRD水平的影响。本研究考察了一个所有权集中度高、制度环境独特的发展中国家，即沙特阿拉伯王国，不同类型的所有权对CRD的影响。该研究对沙特上市公司四年来的年报进行了面板数据分析。研究结果表明，股权结构对企业创新能力的影响较大。但是，这种影响的程度和方向取决于所有权的类型。王室所有权和政府所有权较高的公司披露的风险相关信息更多。相比之下，家族所有权和机构所有权较高的公司往往披露较少的风险相关信息。而执行董事持股比例和非执行董事持股比例对CRD没有影响。结果表明，并非所有的控制家庭都具有相同的特征和动机进行CRD实践。总体而言，研究结果证实了股权结构通过增加(减少)CRD影响代理冲突的重要作用。本研究的结果支持使用不同的理论来更好地解释CRD现象。该研究对沙特阿拉伯和发展中国家的政策制定者、监管当局和从业者改进CRD实践和优化所有权结构具有重要意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Business and Economic Horizons ECONOMICS-

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期刊介绍： The Business and Economic Horizons (BEH) is an international peer-reviewed journal that publishes high quality theoretical, empirical, and review papers covering the broad spectrum of research in areas of economics, business, management, and finance. The journal aim is to bridge the gap between the theory and the observed data in these constantly developing domains. BEH Editorial Board welcomes the high-quality original research articles and review papers that verify the well-grounded and the emerging theories by employing the econometric, statistical methods or other relevant empirical methods in theoretical and applied economic analysis. BEH does not discriminate articles utilizing the non-mainstream approaches such as experimental research, institutional analysis, other variations of heterodox and developmental economic studies. Therefore, the submissions in any field of micro- and macroeconomics, business ethics, economic policy or finance are appropriate for this journal. We hope, the provided contributions will help to understand the contemporary challenges faced by the private and public sector and will establish an international forum of empirical research.