Saudi Cultural Missions Theses & Dissertations

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IPO Governance in Saudi Arabia's Energy Sector: Legal Structures, Compliance, and Reform under Vision 2030
(Saudi Digital Library, 2025) Aljohani, Mohammed; Nigro, Casimiro
This thesis examines the legal and institutional dimensions of initial public offerings (IPOs) in Saudi Arabia’s energy sector, with a focus on how corporate governance, compliance, and ESG mechanisms are formalized within state-owned enterprises (SOEs) undergoing partial market exposure. IPOs in this context are not solely financial transactions but are also instruments of institutional transformation—tools that enable alignment with international standards while accommodating sovereign policy priorities. Employing a doctrinal legal methodology supported by a case study of Saudi Aramco, the research investigates how statutory provisions, Capital Market Authority regulations, and corporate governance codes shape the IPO process, particularly in relation to board independence, disclosure obligations, and sustainability oversight. The findings reveal that although the Saudi regulatory framework demonstrates formal convergence with global governance norms, its implementation reflects selective adaptation, shaped by the continued presence of state ownership through entities such as the Public Investment Fund. The thesis further explores how IPO governance structures are designed to advance transparency, investor confidence, and ESG integration, while retaining flexibility for national development strategies under Vision 2030. In doing so, it contributes to corporate governance literature by offering a nuanced understanding of hybrid regulatory models, where public-sector priorities and market-facing reforms coexist. Ultimately, the study argues that IPOs in Saudi Arabia’s energy sector function as calibrated mechanisms of governance modernization, balancing legal compliance, institutional credibility, and sovereign interests, rather than serving as vehicles of full privatization or market liberalization.
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A comparative analysis of corporate governance frameworks’ roles in integrating ESG into mergers and acquisitions in the UK and the US, and how they enable or hinder its integration in mergers and acquisitions.
(Saudi Digital Library, 2025) Jan, Jumanah; Clare, Patton
This research examines the role of corporate governance frameworks in the UK and the US in enabling or hindering the integration of ESG in mergers and acquisitions. As ESG has become increasingly significant to transactional outcomes, yet a gap persists in comprehending whether governance integrates as an essential component or permits it to remain optional. This research examines this deficiency through a comparative legal analysis of the framework of the United Kingdom and the United States. This research implements a doctrinal and comparative methodology to examine legislation, soft-law instruments, and case law in both jurisdictions, supported by academic and empirical evidence. The analysis compares the UK’s principled approach, whilst assessing section 172 of the Companies Act 2006, and the US’s prescriptive approach embedded in Delaware’s fiduciary duties. The findings reveal that the UK framework is designed to grant flexibility but is obstructed by inadequate enforcement. In contrast, the US framework provides assurance yet is constrained by its focus on shareholder primacy. Consequently, neither framework completely embeds ESG into M&A, hence its integration is dependent on the board's commitment, investor pressure, and market conditions. This dissertation suggests that corporate governance functions as both a promoter and a hindrance to ESG in M&A, highlighting the necessity for more uniform guidelines, ESG metrics, and to reconcile the disparity between ESG’s theoretical significance and its inconsistent practical application.
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The Role of Analyst Coverage on Earnings Management, Firm Outcomes, and Environmental, Social, and Governance (ESG) Performance
(Saudi Digital Library, 2025) Alanazi, Bandar; Abdul Wahab, Effiezal; Haider, Imran
The purpose of this thesis is to investigate the influence of analyst coverage on member countries of the Gulf Cooperation Council (GCC). The investigation includes earnings management, firm outcomes, and environmental, social, and governance (ESG) performance as dependent variables for the empirical studies. In addition, this thesis examines the moderating influence of political connections on the relationship between analyst coverage and those variables among GCC stock exchanges. This thesis contributes to the literature by providing empirical insights on various aspects of earnings management, firm outcomes and ESG performance in GCC countries. The first chapter presents the background of the economy and accounting information in the GCC region. Due to their focus on a more sustainable and diversified economy by moving away from a dependence on oil and gas, GCC countries are undergoing a pivotal phase of economic and social transformation. The chapter also provides the motivation for the empirical studies and summarises the findings and contributions to the existing literature. The second chapter presents a comprehensive literature review exploring analyst coverage across global markets. It discusses the methodology and findings, explains how analysts influence firm characteristics and decision-making, and identifies the factors that determine the extent of analyst coverage. The third chapter of this thesis, entitled “Analyst Coverage and Earnings Management”, aims to investigate the effect of analyst coverage on earnings management among GCC firms. The study also explores the relationship between analyst coverage and earnings management, taking into consideration the impact of the royal family in the region. This paper’s methodology employs panel data to investigate analyst coverage and its influence on two measures of earnings management decisions – accrual and real earnings management – as well as whether the royal family moderates the relationship between analyst coverage and earnings management. The analysis covers non-financial firms listed on six emerging capital markets in the GCC over a nine-year period from 2013 to 2021. The premise is that higher levels of analyst following can mitigate agency problems between shareholders and management by providing an information intermediary and ensuring interests are aligned. Based on 991 firm-year observations for non-financial firms listed on GCC stock exchanges, this study finds a negative relationship between analyst coverage, accruals and real earnings management. A more negative relationship between analyst coverage and earnings management is found in the extended analysis focusing on royal family affiliation. The results of tests of potential endogeneity bias remain consistent with the main findings. The fourth chapter of this thesis, entitled “Analyst Coverage and Firm Outcomes”, investigates how analyst coverage affects GCC firms. The findings reveal a significant association between analyst coverage and firm outcomes in GCC firms. It also explores how royal family affiliations affect this relationship in the region by using public non-financial firms listed in the GCC from 2013 to 2021, which constitutes a sample of 992 firm-year observations. The study finds that analyst following has a significant impact on firm outcomes. A higher level of analyst coverage of the firm leads to improved firm outcomes, which mitigates the agency problem between shareholders and management. This supports the argument that the role played by analysts is crucial to reducing information asymmetry. In addition, royal families positively (negatively) moderate the association between analyst coverage and firm outcomes. Furthermore, the findings remain robust after endogeneity tests. The fifth chapter of this thesis, entitled “Analyst Coverage and ESG Performance”, examines the relationship between analyst coverage and environmental, social, and governance (ESG) performance in GCC firms. Using a sample of public non-financial firms listed on GCC stock exchanges from 2012 to 2023, this study finds a significantly positive association between analyst coverage and ESG performance. Further, the findings indicate that analyst affiliation affects the relationship: international analysts exhibit a more pronounced positive relationship than other analysts. The results are qualitatively similar after controlling for endogeneity. Finally, the last chapter provides the conclusion to the thesis and outlines directions for future research.
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Essays on Religiosity and Finance: Evidence from Saudi Arabia
(Saudi Digital Library, 2025) Alwehaibi, Abdulmajeed Abdullah; Chou, Daisy; Le, Anh
This 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.
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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, Sylvia
This 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.
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Sustainability and Risk Management in Saudi Arabia’s Giga Projects: A Case Study of NEOM
(Saudi Digital Library, 2025) ALSHEHRI, BADER AWADH; Hasan, Fakhrul
This 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.
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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, Fabio
This 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.
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Weather, Sustainability and Islamic Finance
(University of New Orleans, 2025) AlKatheery, Nouf; Hassan, Mohammad
The 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.
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Liquidity Creation, Bank Funding, and Risk-Taking: The Role of ESG
(University of New Orleans, 2025-05) Bin Kowibeen, Sattam; Hassan, M. Kabir
This 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.
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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. Kabir
This 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.
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