Corruption perception, institutional quality and performance of Egyptian listed companies:Evidence from Econometric models

Document Type

Article

Publication Date

Winter 1-9-2025

Abstract

Abstract

Purpose– This study aims to examine the impact of corruption perception and institutional quality on the

performance of publicly listed companies in Egypt.

Design/methodology/approach– Data from 42 publicly traded Egyptian rms during 2013–2022 were

analyzed. Corruption was measured using the Transparency International Corruption Perceptions Index, while

institutional quality was assessed through a composite measure derived from World Bank Governance

Indicators using principal component analysis. The study used a generalized method of moments dynamic

panel model for the analysis.

Findings– The results reveal a negative relationship between corruption and rm performance, both in

market value (Tobin’s Q) and accounting outcomes (ROA). Institutional quality also inversely affects

performance, indicating that corruption and weak governance undermine corporate success in Egypt.

Research limitations/implications– The ndings are speci c to the 2013–2022 period and exclude newly

listed rms due to data limitations. Future studies could expand the sample and timeframe to provide broader

insights.

Practical implications– The study underscores the need for stronger governance and institutional reforms.

Policymakers and regulators must address corruption and improve institutional frameworks to enhance rm

performance and market con dence.

Originality/value– This study challenges the positivist view of corruption, presenting evidence of its

detrimental effects in the Egyptian context. It contributes to the limited research on how corruption perception

and institutional quality affect rm performance in Egypt.

Keywords Corruption perception, Institutional quality, Firm performance, Dynamic panel model,

Egypt, Econometrics

Paper type Research paper

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