Does the legal form matter for firm performance in the MENA region?

Abstract

AbstractThis paper attempts to examine the relationship between firm legal form and firm performance in the Middle East and North Africa (MENA) region using the World Bank Enterprise Survey (WBES) database. As per our analysis, it was determined that open shareholding, closed shareholding, partnership, and limited partnership companies have an advantage in terms of annual sales and annual productivity growth rates over sole proprietorship firms and that medium‐sized and large‐sized firms also demonstrate an advantage over small ones. Furthermore, our analysis shows that foreign ownership, exporting activities, the usage of the web in communication with clients and suppliers, and the presence of full‐time workers have positively affected firm performance. These findings are deemed robust when running the analysis for firms with female participation in ownership. This paper provides directions for strategists targeting at improving the performance of firms.