Ownership Structure, Corporate Governance, Corporate Performance and Egyptian Revolution
: Evidence from an Emerging Market

  • Heba Farid

Student thesis: Doctoral Thesis


A crucial question is investigated in the present work, namely: in which way has the 2011 Egyptian Revolution affected, economically speaking, firm performance, ownership structure types, and corporate governance mechanisms? Ownership structure and corporate governance (hereafter referred to as CG) are two of the most important variables affecting firm performance. Accordingly, this study shows how the Revolution impacted the relationship between CG mechanisms and firm performance, as well as that between ownership structure types and firm performance. Furthermore, it studies the extent to which Egyptian listed firms which voluntarily comply with and disclose Egyptian CG practices have been affected by the Revolution of 2011. This essential question is answered using a sample of 101 (992 observations) non-financial listed Egyptian companies for the period spanning 2008-2017 using agency theory and resource dependence theory.

The results revealed that the Revolution has had a negative and significant impact on firms’ performance measured by ROA, ROE, and Tobin’s Q. Similarly, the Revolution has had a negative effect on the relationship between ownership structure types and firm performance, but a positive impact on the relationship between CG and firm performance. These findings shed light on the important role of CG in helping to overcome the negative effect of the Revolution and putting an end to companies’ internal drawbacks. Overall, the results are consistent with the predictions of agency theory and resource dependence theory. The thesis’ results have important implications for investors, analysts, regulators, policymakers, and managers who are interested in firm performance and who wish to overcome the economic consequences of the Egyptian Revolution of 2011. Said implications include highlighting the importance of the CG practices to improve firm performance in Egypt by enhancing the current disclosure of CG practices and the CG annual reports to support future empirical studies. Moreover, the findings are useful for researchers investigating how the Revolution has affected the ownership structure of Egyptian firms.

The thesis’ main contribution is to study the economic impact of the Egyptian Revolution on Egyptian firms. This contribution can be explained and divided into the following key parts. First, this thesis illustrates the impact of the Revolution on the relationship between firms’ internal CG mechanisms and firm performance, while at the same time highlighting the importance of the internal CG mechanisms. Both of the above-mentioned theories are used, as the economic impact is a crucial question, meaning that different theories are needed to answer and support it. Furthermore, the study provides evidence related to the aforementioned economic impact in a voluntary CG setting and a “comply or explain” CG code together in Egypt. Second, the Revolution’s impact on the relationship between ownership structure types and firm performance is examined. Said examination shows the importance of having certain types of ownership in order to recover from such an economic impact. The thesis advances knowledge of the Revolution’s impact by studying how a revolution influences financial performance. Third, and finally, in order to ensure that the findings are robust, the present thesis employs a number of econometric methods that deal with different types of endogeneities and lagged effect, namely the system generalized method of moments (SGMM) and principal component analysis (PCA). The purpose of this is to ascertain the exact effect of the Revolution on the mentioned relationships.
Date of Award2023
Original languageEnglish

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