Abstract

This study examines internal corporate governance mechanisms in the Egyptian securities market and aims to shed new light on understanding how the structure of internal governance mechanisms differs from that of the extensively studied governance mechanisms in developed countries It investigates the impact of state ownership private ownership managerial ownership and employee association ownership on financial performance The author tests the hypotheses on a sample of 70 Egyptian firms over a six-year period from 2005 to 2010 The sample includes the most Egyptian active firms EGX 100 listed on the Egyptian stock exchange To investigate the influence of ownership structure on performance this study adopts the agency theory and the resource-based view to develop the hypotheses The analysis shows the important role of private ownership and managerial ownership in firm performance However state ownership has provided inconsistent results with the two performance measures For employee ownership the inconsistency across the two performance measures can be justified by the positive investors perception about this type of ownership as it evolved as consequences of the privatisati on programme for state-owned companies In conclusion the findings of the study help stimulate further research into identifying the contingency conditions upon which ownership structure affect firm performance The empirical results also have some managerial implications for reforming ownership structure