Saudi Cultural Missions Theses & Dissertations
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Item Restricted CEO Personal Attributes, Time Preference, and Corporate Decisions(2023-07-03) Alosaimi, Abdulmohsen; Fairchild, Richard; Hassanniakalager, ArmanThe thesis contains three empirical studies that have been applied to the Saudi stock market regarding behavioural finance and corporate governance. To address the personal attributes of chief executives (CEOs), we design three research questions to understand and discuss how CEO overconfidence and CEO horizon may affect the decisions of non-financial listed companies. The first empirical study (chapter 3) discusses that overconfident CEOs could have a significant effect on a firm's performance by influencing financial and investment decisions according to the empirical literature. This investigational study uses a cross-sectional design to test whether CEO overconfidence affects time preferences and establishes which orientation overconfident CEOs follow. Our findings confirm that overconfident CEOs are more future-orientated which means that overconfident CEOs have greater ability to focus on the future rather than the present. The results also indicate that overconfidence is positively related to risk which is consistent with the findings of numerous academic studies. Also, the association between age and risk is negative and statistically significant. Our findings are robust following the alternative measurement's testing for CEO overconfidence, time preference, and alternative estimation techniques and endogeneity tests. The second empirical study (chapter 4) investigates the effect of CEOs’ overconfidence and CEO long-horizon on corporate leverage decisions using balanced panel data for a sample of 119 non-financial firms on the Saudi Stock Exchange (TASI) during the period 2016-2020. The chosen model is the Pooled OLS model which is employed as an analytical technique. The findings confirm that overconfident CEOs are significantly and positively related to financial leverage which indicates that overconfident CEOs tend to take likely more debt in their capital structure of firms. This study also finds evidence that firms led by CEOs who have a longer horizon are more likely to have a higher level of debt. We also establish to examine the combined influence of CEO overconfidence and CEO long horizon on corporate leverage which are found to be significant and positive. The results are robust to various tests and alternative explanations. The final empirical study (chapter 5) focuses on horizon problems that pronouncedly arise when CEOs are close to departing their position for retirement where they are more likely to focus on the short-term in order to protect their successful legacy. Overconfidence involves overestimating their skills, knowledge, abilities and likelihood of success by inflating their projected future earnings and investment returns. This paper examines the influence of CEO horizon and CEO overconfidence on the dividend policy of firms using a sample of the 119 largest Saudi listed companies during the period 2016-2020 with the expectation that CEOs approaching retirement may lead firms to pay a dividend. The findings are that short horizon CEOs positively affect the dividend policy which is consistent with our prediction. In turn, CEO overconfidence is insignificantly related to dividend policy. Our findings remain robust after testing the alternative measurement of dividend policy, alternative estimation methods, alternative measurement of CEO horizon, and following making endogeneity checks.19 0Item Restricted Corporate Governance and Financial Policies of Family Businesses Listed on the Saudi Stock Exchange (Tadawul)(Saudi Digital Library, 2023-06-09) Alharbi, Abdullah Sunautan H; Yarram, Subba ReddyThe main aim of this study is to investigate the relationship between family ownership, characteristics of board of directors and both the dividend policy and capital structure in the Saudi context. Saudi Arabia is a member of the G20 group and one of the leading countries in the Middle East and among developing states. It is distinguished by different economic and financial systems to more advanced and developed countries. In addition, the Saudi Arabian economy is largely characterised by family-owned businesses. Furthermore, the ownership structure of the listed Saudi Arabian companies is dominated by families. However, little research has been conducted to examine the association between family ownership, characteristics of board directors and both the dividend policy and capital structure in the Saudi setting. Therefore, it is vital to address the research gap in the existing literature review. Groups of theories and frameworks used in the current study include social emotional wealth theory, agency, stewardship, stakeholder theory, transaction cost and political theories. As a result of reviewing of these theories and findings, a range of hypotheses have been formulated. Additionally, the data were gathered from the Refinitiv Eikon and company annual reports of 88 non-financial firms listed on the Saudi Stock Exchange from 2010 to 2018, for a total of 787 observation year data sets. Panel regression procedures employed to analyse the data include random effects logistics, random effects tobit, panel correction standard error regressions and the generalised method moments estimator.24 0