Firm- and Country-Level Antecedents of Corporate Governance Compliance and Disclosure in MENA Countries

Purpose – This paper investigates the level of compliance with, and disclosure of, corporate governance best practice recommendations, and the firm- and country-level factors that can explain discernible differences in the level of compliance with, and disclosure of, corporate governance best practice recommendations in a number of Middle Eastern and North African (MENA) countries.Design/methodology/approach – We use the widely employed content analysis technique to examine the level of compliance with, and disclosure of, corporate governance best practice recommendations in a sample of listed corporations in MENA countries. In addition, we employ the ordinary least square multiple regression analysis technique to examine the firm- and country-level antecedents of the level of compliance with, and disclosure of, corporate governance best practice recommendations. The findings are generally robust to different types of firm- and country-level factors, alternative measures and potential endogeneity problems.Findings – The findings of this study are two-fold. First, the level of voluntary compliance with, and disclosure of, corporate governance best practice recommendations among MENA listed corporations is low and differs substantially across firms. Second, our evidence suggests that firm- and country-level factors, including religiosity, national governance quality and macroeconomic factors have a positive and significant impact on voluntary compliance with, and disclosure of, corporate governance best practice recommendations.Originality/value – To the best of our knowledge, this paper is the first to examine both the potential firm- and country-level factors affecting voluntary compliance with, and disclosure of, corporate governance best practice recommendations among MENA listed corporations within a neo-institutional theoretical perspective. The results of our study provide regulators and policy-makers with the impetus to encourage greater efforts towards pursuing reforms that seek to improve national governance quality, economic environment and positive religious practices