Corporate Governance Mechanisms and the Insolvency Risk: Evidence from GCC Countries
| Author | Al Haddad, Ola Hassan | |
|---|---|---|
| metadata.dc.contributor.department | University of Bahrain, College of Business Administration, Accounting Department | |
| metadata.dc.date.accessioned | 2026-09-20T15:47:11Z | |
| Publication date | 2022 | |
| Degree level | Master | |
| Abstract | Abstract: This study aims to investigate the relationship between corporate governance mechanisms and the insolvency risk of publicly listed companies in the GCC stock exchanges. This investigation is conducted by utilizing multinomial logistic regression analysis. This study has considered nine corporate governance mechanisms which include board size, board meetings, board independence, blockholders ownership, institutional ownership, executive ownership, audit committee size, audit committee meetings and audit committee independence. The results show that there is a significant negative association between board size and the insolvency risk, which determines that in the case that the firm has more members on the board, there is a higher likelihood that it will have a low insolvency risk. The results also show that there is a significant positive relationship between board meetings and insolvency risk, thus indicating that the more and frequent meetings, the more likely it is that the firm will experience a higher insolvency risk. However, the results show that the board independence has no significant impact on the firm's insolvency risk. Regarding the ownership structure characteristics, the results have shown that blockholders ownership has a positive relationship with insolvency risk, however, the results show that the institutional ownership and the executive ownership, have no significant impact on the firms' insolvency risk. Additionally, regarding the audit committee characteristics, the results show that there is a positive relationship between audit committee size and insolvency risk. Whereas the frequency of audit committee meetings has a negative impact on the firms' insolvency risk. However, the results of the final independent variable, the audit committee independence, have contradicted each other in the first and second models, where the first model concluded that the audit committee independence has no significant impact on the insolvency risk, whereas in the second model, results have inferred that there is a negative relationship between the audit committee independence and the insolvency risk. Consequently, the outcome of this study provides a useful contribution to policymakers, investors, and other stakcholders in the firm to follow essential precautionary measures in order to avoid financial distress and insolvency risk. Keywords - Corporate Governance, Insolvency Risk, Financial Distress, Altman Z- Score, GCC Countries | |
| metadata.dc.identifier.other | https://digitalrepository.uob.edu.bh/id/60c26118-c49a-4d36-95d3-9ff96a152c22 | |
| metadata.dc.identifier.other | Drupal node 2976 | |
| metadata.dc.identifier.other | https://digitalrepository.uob.edu.bh/en/dar/corporate-governance-mechanisms-and-insolvency-risk-evidence-gcc-countries | |
| metadata.dc.identifier.uri | http://165.227.56.122/handle/123456789/6550 | |
| Language | en | |
| Link | https://digitalrepository.uob.edu.bh/en/_flysystem/fedora/2025-03/0057-corporate-governance-mechanisms-and-the-insolvency-risk-evidence-from-gcc-countries.pdf | |
| Title | Corporate Governance Mechanisms and the Insolvency Risk: Evidence from GCC Countries | |
| Type | Master's Thesis | |
| College | College of Business Administration | |
| Department | Accounting |
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