Saudi Cultural Missions Theses & Dissertations
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Item Restricted Essays on Religiosity and Finance: Evidence from Saudi Arabia(Saudi Digital Library, 2025) Alwehaibi, Abdulmajeed Abdullah; Chou, Daisy; Le, AnhThis thesis examines the relatively underexplored influences of informal institutions, particularly religiosity, on corporate outcomes. Drawing on the theory of social norms, it investigates how Islamic religiosity, as a form of religious social norms, shapes firm behaviour in Saudi Arabia. The study focuses on three key areas: corporate investment efficiency, corporate risk-taking behaviour and corporate environmental, social, and governance (ESG) practices. The research employs panel data analysis to evaluate these relationships among companies listed in Saudi Arabia from 2012 to 2020. In the first essay, the primary finding is that the firm’s headquarters, located in a community with a higher Islamic religiosity level, positively influences corporate investment efficiency. Furthermore, our findings indicate that the beneficial link between religiosity and investment efficiency is more pronounced in firms that are not financially constrained and those without significant institutional ownership. In companies that do not face significant financial limitations, the principles guided by Islamic religiosity appear to facilitate more effective investment decisions and better allocations. Similarly, the absence of significant institutional ownership suggests that without strong external governance mechanisms, internal cultural norms such as religiosity can be critical in enhancing monitoring functions, guiding corporate behaviour, and improving investment efficiency. Finally, our study finds a negative correlation between Islamic religiosity and agency costs. This finding implies that the advantageous effect of Islamic religiosity may largely stem from its role in diminishing agency conflicts. Reducing these conflicts plays a key role in the beneficial outcomes associated with implementing these norms. In the second essay, empirical evidence demonstrates that firms headquartered in communities with higher Islamic religiosity tend to engage in lower levels of corporate risk-taking. This effect is more pronounced in firms with lower institutional and foreign ownership, where external monitoring is weaker. The results suggest that Islamic religiosity plays a monitoring role, helping to curb excessive risk-taking. They support the proposed mechanism that religiosity constrains corporate risk-taking, especially in settings with limited institutional oversight. Moreover, the influence of Islamic religiosity appears to be offset in firms with foreign ownership, likely due to the introduction of different cultural norms and governance practices. Conversely, firms without foreign ownership appear more aligned with local religious norms, reinforcing the inverse relationship between religiosity and risk-taking. Furthermore, the study identifies a positive relationship between Islamic religiosity and corporate performance. Firms headquartered in communities with higher levels of religiosity are more likely to experience exceptional positive performance and are less susceptible to extreme negative outcomes. This balance contributes to their superior average performance and highlights the value-enhancing effects of religiosity. Path analysis further shows that Islamic religiosity reduces risk-taking, which, in turn, contributes to higher firm performance. In the third essay, findings reveal that firms operating in communities with higher levels of Islamic religiosity tend to exhibit lower ESG activities. This effect is particularly pronounced among financially constrained firms, where the added costs and potential inefficiencies of ESG initiatives may shrink profit margins and thus weaken managerial incentives to invest in them, especially when firms align with prevailing religious norms and enjoy the confidence of market participants. Moreover, higher levels of Islamic religiosity are associated with reduced agency costs, indicating that Islamic religiosity promotes ethical behaviour and limits managerial self-interest, thereby diminishing the need for ESG as a governance mechanism. These findings suggest that Islamic social norms can serve as a substitute for corporate ESG. In highly religious environments, where ethical conduct is expected and stakeholder trust is strong, ESG activities may offer limited signalling value and appear less necessary. These results provide important implications for policymakers and investors, offering insights into decision-making processes in emerging markets. By addressing the previously unexplored relationship between Islamic religiosity and corporate outcomes, this thesis enriches the existing literature and sheds light on the unique characteristics of the Saudi financial market as an emerging economy.33 0Item Restricted The Effect of ESG Disclosure and ESG Performance on Firm Financial Performance: The Moderating Role of Economic Conditions(Saudi Digital Library, 2025) Basahi, Ruba; Zhang, SylviaThis study examines how environmental, social, and governance (ESG) disclosure and performance influence firm financial performance, and whether these effects differ under varying economic conditions. Drawing on stakeholder, signalling, legitimacy, and agency theories, the study differentiates between ESG disclosure as an external communication tool and ESG performance as a reflection of actual practices. Using panel data from S&P 500 firms spanning 2006-2023, fixed effects regressions with clustered standard errors are employed to control for unobserved heterogeneity and firm-level dynamics. Financial performance is measured using ROA, ROE, and Tobin’s Q. The results show that both ESG disclosure and performance are positively and significantly associated with all three financial outcomes, indicating broad financial benefits across operational and market-based metrics. However, during crisis periods (2008-2009 and 2020-2021), ESG disclosure and performance are each significantly associated only with ROA, suggesting that ESG practices primarily support internal profitability under economic stress. However, the results do not support the hypothesis that ESG performance offers stronger financial benefits than disclosure. Both variables show similar economic effects on ROA, with no significant relationship to ROE or Tobin’s Q. These findings challenge the assumption that ESG performance always offers superior financial value over disclosure. Both ESG disclosure and performance appear to support operational resilience during downturns, though their financial effects are concentrated in internal outcomes such as profitability rather than in market-based measures. Overall, the results emphasise the need to evaluate ESG’s financial implications through a context-sensitive lens, particularly under varying economic conditions.7 0Item Restricted Sustainability and Risk Management in Saudi Arabia’s Giga Projects: A Case Study of NEOM(Saudi Digital Library, 2025) ALSHEHRI, BADER AWADH; Hasan, FakhrulThis study critically investigates the sustainability practices, risk governance frameworks, and financial mechanisms underpinning NEOM, Saudi Arabia’s flagship giga-project under Vision 2030. Using a qualitative case study approach, supported by semi-structured interviews with ten domain experts, the research explores how sustainability is conceptualised and operationalised, how environmental, financial, and geopolitical risks are governed, and how the Public Investment Fund (PIF) influences financing and ESG integration. Thematic analysis in NVivo identified four overarching themes: sustainability conceptualisation and strategic alignment, risk landscape and governance structures, financing mechanisms and ESG integration, and future improvements through measurement frameworks. Findings reveal that while NEOM embeds ambitious sustainability goals, such as renewable energy and hydrogen production, governance gaps remain in risk management, stakeholder inclusivity, and financial transparency. Theoretically, the study extends the application of the Triple Bottom Line, Stakeholder Theory, and Institutional Theory to giga-project governance, illustrating how sustainability functions both as substance and symbolic branding in state-led development. Practically, the research highlights the need for enforceable regulatory frameworks, transparent ESG disclosure, and robust performance metrics to transform NEOM from a reputational project into a credible global model of sustainable urbanism.6 0Item Restricted Employee-Related Disclosures and Capital Market Reactions: Analysing Human Capital Disclosure, Wellbeing Washing, and CEO Pay Ratios(Saudi Digital Library, 2025) Almubarak, Alhanouf; Marques, Ana; Motoki, FabioThis dissertation includes three empirical studies on the topic of employee-related disclosures. The first study investigates the association between human capital disclosures and firms’ performance (i.e., profitability and value) and examines how a recent U.S. Securities and Exchange Commission (SEC) change in mandated human capital disclosure is associated with these outcomes. I examine the disclosures of Standard & Poor's (S&P) 500 firms from 2012 to 2021 and have three main results. First, human capital disclosure is positively associated with firms' performance. Second, the change in the SEC's required human capital disclosure is associated with an increase in firms' human capital disclosure. Third, from the year when the SEC initiated discussions about the amendment (2016) to 2019, there was a noticeable increase in the association between disclosure and firm profitability. However, this association disappears after the implementation of the mandated changes (2020 and 2021). The second study investigates wellbeing washing, where firms claim to prioritise the wellbeing of their employees but fail to implement measures to put this into practice. I focus on wellbeing disclosures in Environmental, Social, and Governance (ESG) reports, particularly those of S&P 100 firms from 2018 to 2022. I examine the association between firms' disclosures regarding employee wellbeing and the ratings of employees on the Glassdoor website. I find that, overall, wellbeing disclosures in ESG reports are negatively associated with contemporaneous Glassdoor ratings of current employees. Additionally, I find firms that disclose a high level of wellbeing information, regardless of their actual employee satisfaction, have a significantly higher market value. The third study investigates the association between CEO-to-median employee pay ratios and firm-level risk, using a sample from the S&P 100 from 2018 to 2022. I find a positive association between the CEO pay ratio and firm-level risk. However, this association does not exist in socially responsible firms, as I find no association between CEO pay ratios and firm-level risk.26 0Item Restricted Weather, Sustainability and Islamic Finance(University of New Orleans, 2025) AlKatheery, Nouf; Hassan, MohammadThe first essay examines how weather conditions affect stock market performance in the Saudi Stock Exchange (TASI). To investigate this relationship, the study employs multiple regression analysis in conjunction with the GJR-GARCH model. we analyze the effects of Air Temperature, Relative Humidity, Wind Speed, and Rainfall on TASI returns. Results indicate Air Temperature has the most significant influence. The impact of weather weakened after foreign investors entered the market, suggesting a shift in investor behavior. Sectoral analysis reveals that the Energy, Information Technology, and Utilities sectors are the most resilient to weather variations. This second essay examines the impact of Environmental, Social, and Governance factors on the profitability of conventional and Islamic banks. Using structural equation modeling, the findings reveal that the Environmental pillar positively impacts profitability in Islamic banks. The Social pillar negatively affects profitability in Islamic banks, while the Governance pillar increases profitability in conventional banks but reduces it in Islamic banks. These results highlight the need for Islamic banks to optimize social initiatives and governance frameworks while conventional banks should enhance environmental strategies.32 0Item Restricted Liquidity Creation, Bank Funding, and Risk-Taking: The Role of ESG(University of New Orleans, 2025-05) Bin Kowibeen, Sattam; Hassan, M. KabirThis dissertation explores two critical types of risks faced by banks that include liquidity risk and credit risk. Furthermore, it tests whether bank regulations such as adopting the environmental, social, and governance (ESG) standards in addition to diversifying funding resources play crucial roles in mitigating them. Also, this dissertation aims to provide evidence of whether these risks vary depending on banks sizes. The final sample consists of 136 U.S. commercial banks covering the period from 2005 to 2022. Furthermore, a variety of econometric methods are applied that include OLS regression, random effects (RE), two-step system Generalized Method of Moments (GMM), regression discontinuity (RD), the bias-corrected Least- Squares with Dummy Variables (LSDVC), and the Two-Stage Least Squares regression (2SLS). The first chapter investigates whether ESG performance plays a mediating role in the effect of funding costs on bank liquidity creation. The findings of this chapter reveal that funding costs significantly reduce liquidity creation, implying that higher funding costs decrease banks’ ability to create liquidity. Additionally, adopting ESG principles increases banks’ ability to create more liquidity. Moreover, ESG performance of the sampling banks plays a significant role in mediating the relationship between funding costs and liquidity creation, which implies that depositors accept low interest payments due to the good ESG performance of the sampling banks, which suggests increasing the ability of the sampling banks to create liquidity. The second chapter examines the effect of bank liquidity creation and bank funding diversification on bank risk-taking, as represented by non-performing loans (NPLs). Moreover, the chapter aims to explore the mediating role of bank size in these relationships. The findings of this chapter show that NPLs increase significantly as the sampling banks create more liquidity. Furthermore, funding diversification significantly reduces NPLs and enhances the stability of the sampling banks. Finally, bank size significantly moderate the impact of bank liquidity creation and bank funding diversification on NPLs, which is more evident for the case of large banks.135 0Item Restricted Sustainability Reporting, Global Uncertainty, Cost of Capital and Firm Performance: The Case of Global Energy Industry(University of New Orleans, 2025) Alshehri, Abdullah; Hassan, M. KabirThis study examines the impact of ESG (Environmental, Social, and Governance) performance on financial metrics within the energy sector, focusing on cost of capital and firm performance, with moderating factors such as the World Uncertainty Index (WUI) and Climate Vulnerability Index (CVI). The first study investigates how ESG performance affects the cost of capital measured as weighted average cost of capital (WACC), cost of equity, and cost of debt in energy firms. Using ordinary least squares regressions and longitudinal data from the LSEG database, findings reveal that higher ESG scores, including individual pillar performance (Environmental, Social, Governance), consistently reduce all three cost-of-capital measures. The WUI significantly moderates this relationship, amplifying ESG’s cost-lowering effect amid global uncertainty, offering energy managers a pathway to optimize capital structure while enhancing sustainability. The second study explores ESG’s impact on firm performance proxied by return on assets (ROA), return on equity (ROE), and earnings per share (EPS), across 700 energy firms from 2007–2023, analyzed through panel regression. Results indicate that robust ESG practices, particularly the Social Pillar (e.g., employee relations), strongly enhance ROA and ROE, while the Environmental Pillar drives EPS, underscoring the financial benefits of sustainable practices. Midstream and Downstream energy sectors show the strongest ESG performance links, with the CVI revealing that climate-vulnerable firms with high ESG scores maintain profitability during environmental stress. Collectively, these findings highlight ESG’s transformative potential in reducing financing costs and boosting performance, moderated by uncertainty and climate risks. For practitioners, integrating ESG offers a dual benefit of financial efficiency and resilience, while policymakers can leverage these insights to strengthen ESG reporting and address climate vulnerabilities like biodiversity loss and extreme weather. This research bridges gaps in ESG literature, emphasizing its critical role in shaping energy sector stability and sustainability.29 0Item Restricted Measuring the Variability of ESG: Implications for CSR and Corporate Financial Performance(University of East Anglia, 2024) Aljamaan, Bader; Markellos, RaphaelThis study develops four measures of variability to quantify a firm’s social responsibility performance over time, addressing a significant gap in the literature. Applying these measures on both the overall CSR performance scores, as proxied by ESG scores, and the variability of workforce performance, as scores proxied by workforce scores. While prior studies have extensively examined the impact of the overall CSR performance on corporate financial performance, there is a lack of empirical studies quantifying a firm’s social responsibility performance variability over time and its implications for financial outcomes. Therefore, this study fills this gap by proposing four measures to assess the variability of a firm’s social responsibility performance using ESG scores, and workforce scores and empirically examining their impacts on corporate financial performance. This research seeks to answer two key questions: Does stability in CSR performance improve corporate financial performance? And Does stability in workforce performance enhance corporate financial performance? Using a sample of 379 publicly traded U.S. firms from 2004 to 2022, this study evaluates CSR and workforce performance stability over time through annual ESG scores and workforce scores produced by LSEG (formerly known as Refinitiv, and before that was known as ASSETS4). ESG scores measure a company’s environmental, social, and governance performance, while workforce dimension of social pillar captures how well a firm promotes diversity and inclusion, career development and training, working conditions, and health and safety (Refinitiv, 2021). The study is structured in three parts. First, it develops four measures of stability: (1) coefficients of variation, (2) Beta, (3) temporal trend, and (4) residuals. Second, it applies these measures of a firm’s overall CSR performance using ESG scores, as well as workforce-specific performance using workforce scores. Third, it analyses the relationship between these stability measures and corporate financial performance. The findings reveal that less variability in CSR performance measured by coefficients of variation of ESG (ESGCV) leads to improved firm profitability (ROA). Additionally, Tobin’s q shows significant associations with two stability measures beta of ESG (ESGBETA), a negative impact, indicating that less deviation of CSR performance compared to the market overall CSR performance is rewarded with higher firm value, and CSR temporal trend (ESGTREND), a positive effect, suggesting that improving CSR performance over time in alignment with market trends enhance firm value. However, variability measures do not significantly impact stock returns as one of the corporate financial indicators. Regarding workforce stability performance and its impact of corporate financial performance, the results demonstrate a more pronounced impact on financial performance compared to CSR stability. Higher workforce variability measured by workforce scores coefficient of variation (WFCV) negatively affects both ROA and Tobin’s q, while improving workforce performance over time measured by temporal trend (WFTREND) is associated with marginally higher profitability. Notably, not all stability measures show significant relationships, suggesting that the link between CSR consistency and financial performance may be complex, potentially due to data limitations, measurement challenges or the multifaceted nature of financial performance metrics. Overall, the findings underscore the strategic importance of CSR as a long-term investment, emphasizing the need for continuity and consistency in CSR efforts, particularly in workforce-related initiatives. Firms that sustain or improve CSR performance over time are better positioned to ensure stakeholder satisfaction and secure a sustainable competitive advantage. This study contributes to the literature by introducing new measures of social responsibility stability performance and positioning CSR consistency as a strategic asset. By capturing the variability in both overall CSR and workforce performance, this study highlights the importance of integrating CSR efforts into business operations, with more emphasis on workforce performance as a key component of CSR dimensions. Integrating CSR into organisational strategies has become crucial, reflecting a commitment to ethical behaviour and sustainable efforts. By analysing the stability of CSR performance as a strategic aspect, this study reinforces the view that continuity in CSR efforts, as shown in workforce and overall ESG performance, not only enhances financial performance, but also aligns with the argument that emphasises mutual trust between a firm and its stakeholders. This study therefore provides evidence to support policymakers and managers in prioritising workforce stability as part of CSR, so as to maintain financial performance and generate benefits in the long term.39 0Item Restricted Evaluating The Role of Legal Reforms in ESG Practices in Saudi Arabia: Insights and Implications Within the Framework of Saudi Vision 2030(NUHA, 2024-11-11) Nuha Mansou Alsaeed; Professor Steven VirgilThis dissertation critically examines the role of recent legal reforms in the promotion and integration of Environmental, Social, and Governance (ESG) practices within the corporate landscape of Saudi Arabia, contextualized within the overarching framework of Saudi Vision 2030. As the Kingdom endeavors to transition from an oil-dependent economy to a more diversified and sustainable model, significant regulatory changes have been introduced to enhance corporate transparency, accountability, and sustainability. This research seeks to evaluate the effectiveness of these legal reforms in advancing ESG principles and their alignment with international sustainability standards. Employing a normative legal research methodology, this study provides a comprehensive analysis of the legislative frameworks governing ESG practices in Saudi Arabia. Through a detailed examination of statutory instruments, royal decrees, ministerial regulations, and guidelines, the dissertation elucidates the extent to which legal reforms have shaped corporate behavior in relation to ESG integration. Furthermore, it explores sectoral differences in the adoption and implementation of ESG practices and assesses the impact of Saudi Vision 2030 on corporate sustainability initiatives. The findings of this research contribute to the broader discourse on sustainable development in emerging economies by offering critical insights into the interplay between regulatory frameworks and corporate governance. This dissertation also provides actionable recommendations for policymakers and corporate leaders aimed at enhancing the efficacy of ESG practices in Saudi Arabia, thereby supporting the nation's efforts to achieve a more sustainable, resilient, and globally competitive economy.47 0Item Restricted Governance and Asset Allocation Strategies in the Investment Mutual Funds(Univeresity of Strathclyde, 2024-12) Alsubaie, Aseel; Moore, JedThis research examines the role of governance in asset allocation and portfolio management within the investment mutual fund sector. Modern governance frameworks, influenced by technological advances, ESG requirements, and market volatility, integrate risk management, sustainability, and operational efficiency. The study evaluates how governance structures incorporate ESG criteria, manage technology risks, and ensure resilience during market shifts. Findings suggest that funds with strong governance achieve balanced, risk-averse allocations through diversification and ESG integration. Additionally, AI and ML require governance adjustments to manage related risks. The study emphasizes the need for flexible governance frameworks to address future challenges in an evolving market landscape.28 0