Sustainability strategies and capital costs: A study of non-financial disclosure in the GCC agri-food industry

PurposeThe present paper seeks to investigate the impact of International Financial Reporting Standards (IFRS) adoption on the foreign direct investment (FDI) in the Gulf Cooperation Council (GCC) region for the period 1980–2017. This study relies on the information asymmetry theory, according to which IFRS adoption, as a positive signal for investors, should attract more FDI. This research is crucial and presents an interesting framework for providing a major motivation for empirical insights since the macroeconomic evidence on the impact of IFRS adoption on FDI is still unclear in the GCC region and no empirical evidence has been provided in the existing related literature.Design/methodology/approachThe analysis was conducted based on panel data from GCC countries over the period 1980–2017 and using the autoregressive distributed lag (ARDL) modeling approach and the pooled mean group (PMG) estimation method.FindingsThe findings indicate that the decision of adopting IFRS in GCC countries has a positive impact of 3% on FDI inflows in the short run. However, the adoption of IFRS in the region leads to a decrease of 10.4 % in FDI inflows in the long run.Practical implicationsThese findings should be of a major interest to regulators and policymakers in GCC countries, practitioners and academic researchers, international investors, managers and any other interested groups about the accounting environment in GCC countries and other developing countries having an interest in the economic consequences of IFRS adoption, as a driver of FDI, in developing countries.Originality/valueThis investigation provides original empirical evidence on the effect of IFRS adoption on FDI inflows within the context of the GCC area. In fact, the current international literature is lacking empirical evidence on the effect of IFRS adoption on FDI inflows for the GCC countries as a whole. Furthermore, this study offers an original methodological contribution to the macroeconomic impact of IFRS adoption literature by using the PMG estimator since there has been no research works to date that has used this method of estimation.

: GCC (Lower Oil Prices and Economic Cooperation between Korea and the Middle East)

This study examines the impact of the financial leverage on the Islamic banks’ performance in the GCC countries during the period from 2005-2017. The population of this study included the Islamic banks in the GCC countries. Thirteen years data of 25 listed Islamic banks in the GCC countries were used, wereby these data were retrieved from the Thomson Reuters DataStream. This study utilized the fixed effect regression model. The findings show that the financial leverage a has significant impact on the performance of the Islamic banks’ performance in the GCC region. More specifically, the financial leverage has a positive and significant impact on ROA, ROE, and Tobin’s Q of the Islamic banks in the GCC countries, thus indicating that the higher is the financial leverage the higher is the performance of the Islamic banks in the GCC region. However, the results of this study do not provide evidence to support the Agency Cost Theory that implies a decrease in the performance when equity ratio is increased. On the other hand, the findings provide evidence to support the Signaling Theory that argues that banks are expected to have a better performance credibly in transmitting this information through the higher capital. The findings imply that the level of financial leverage committed by the Islamic banks depends on their flexibility in adjusting their debt value and earning power.

The economic crisis and decline in oil prices caused by the pandemic led governments in the Gulf Cooperation Council (GCC) region to step up their diversification efforts. Prior to the COVID-19 pandemic, the Gulf Cooperation Council (GCC) countries were already striving to diversify their economies away from dependence on hydrocarbons, with varying degrees of success. Their development plans and visions aim to shift their economies away from oil and gas toward knowledge-based post-oil economies with solid and sustainable foundations. Accordingly, this paper has three goals. Firstly, it aims to present the GCC’s socio-economic features and highlight the importance and relevance of economic diversification. Secondly, it seeks to analyze the impact of the COVID-19 pandemic on GCC economies and evaluate how the pandemic spurred diversification initiatives. Thirdly, the paper aims to analyze the present state of the knowledge-based economy in the GCC region, including its strengths, drawbacks, and prospects for the future. The methodology of the paper is based on a semi-systematic literature review that includes academic and gray literature. The findings highlight that throughout the previous several decades, continuous efforts to develop the status of ICT, education, innovation, and entrepreneurship in several GCC countries have contributed to improving their international competitiveness, as seen by advancements in rankings issued by various international organizations. Furthermore, political stability, significant financial resources, and a stable credit rating provide these countries with solid foundations for future sustainable development. However, several functional, structural, and cultural factors challenge the diversification process and the shift toward a knowledge-based economy.

This study seeks to explore the initiatives of the Gulf Cooperation Council (GCC) countries to launch smart cities through developing a framework of smart cities consisting of five pillars namely: infrastructure, health and primary education, technological readiness, innovation and finally, macroeconomic environment. These five pillars are measured using data collected from the Global Competitiveness Report over ten years from 2009 to 2018. Concerning the first pillar, the infrastructure pillar, the results show that the GCC countries achieved a global advanced rank among 138 countries although there is a relative stability in the trend of the rank of the GCC countries during the study period from 2009 to 2018. However, the results reveal that there is an improvement in the rank of the GCC countries in two more pillars which are macroeconomic environment and health and primary education during the study period. Concerning technological readiness and innovation pillars, the GCC countries achieved significant improvement and progress in the trend of their global rank among 138 countries in the world. Furthermore, there is a rapid increase in the GCC countries in adopting modern technology. Finally, it can be argued that the GCC countries have initiatives and basic foundations to launch smart cities.

Interpreting mortality trends in the GCC countries: The healthy migrant effect

Purpose – This paper aims to examine the impact of firm-specific characteristics on managers’ identity disclosure in the Gulf Cooperation Council (GCC) region. Design/methodology/approach – Research data were collected from 2010 annual reports and financial statements of 403 listed firms in the GCC countries. The data were analyzed by multiple regression models. Findings – Evidence suggesting that managers’ identity is significantly disclosed by firms that separate the office of chairman from that of chief executive officer was documented. It was also found that mature firms significantly disclose their managers’ identity. Our finding suggests that firms’ declaration that they comply with a set of corporate governance code leads them to disclose managers’ identity. However, we find that firms that are related to the state significantly disclose their managers’ identity, contrary to expectation. Research limitations/implications – One limitation is the lack of a uniform classification of industries by the stock exchanges in the GCC region. The implication of this is that researchers are lacking a uniform standard to apply in their research. Another limitation is the use of only 2010 annual reports and accounts; thus, there is a problem of inter-temporal generalizability. As markets in the GCC countries are evolving, it will be interesting to capture the state of managers’ identity disclosure after 2010. Practical implications – The paper has the potential to influence firms in the GCC region to begin disclosing managers’ personal details and other contact information. In addition, there is the prospect that market regulators in the GCC region and other emerging markets who may read this research may now require firms to disclose their managers’ identity. Originality/value – This is an Original research paper.

Energy consumption accounts for most of global anthropogenic greenhouse gas emissions. Managing the growth in energy demand is therefore a key part of climate change mitigation. In the Gulf Cooperation Council (GCC) countries, energy consumption has been growing rapidly. Between 2004 and 2014, final energy consumption grew at an average annual rate of 6.8% compared to a global average of 1.8%. Energy efficiency can help GCC countries manage their energy demand growth, but it is difficult to measure energy efficiency, so analysts often rely on indirect indicators such as energy intensity. Frontier analysis can be used to measure energy efficiency, but is data intensive. To undertake frontier analysis for the GCC countries it was therefore necessary to construct a new dataset, which was used for corrected ordinary least squares to estimate underlying energy efficiency between 2004 and 2014 for two key sectors in the GCC countries: residential electricity and road transport gasoline. The results suggest that underlying energy efficiency generally improved in the GCC region, in contrast to the trend of rising energy intensity that the region has been witnessing. The energy efficiency improvements may have been driven by global technical progress and tighter global fuel economy standards, of which the GCC countries were beneficiaries. With the provision of high quality, recent data with shorter lag times, frontier analysis could be used to provide prompt feedback on the impact of energy efficiency policies and programmes, leading to better outcomes.

PurposeThe purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC has an impact on financial performance as well as to identify the IC components that may be the drivers of the traditional indicators of bank success.Design/methodology/approachThe empirical data are drawn from banks’ annual reports over the three-year period of 2008 to 2010. Ordinary least squares regression analysis is constructed to examine the relationships between IC and the banks’ financial performance indicators. Pulic’s value-added intellectual coefficient method (VAIC) is applied to measure IC performance.FindingsEmpirical findings, after controlling for bank size and global financial crisis, indicate that IC is positively associated with bank financial performance indicators in all GCC countries. However, when VAIC is split into its three components, the relationships between these components and bank financial performance indicators are varied.Research limitations/implicationsThe main limitation of this study is the use of IC measurement model. Its basic advantage (simplicity and ease of use) is also its main limitation. The main problem is measuring the contribution of something which is not physical and cannot be easily quantified. The key issue is that the value created by IC is indirect. However, at present, no perfect solution is available for intellectual capital measurement, as the area is still exploring the best possible solutions.Practical implicationsThe results may extend the understanding of the role of IC in banking sector in GCC region and may give inputs to managers of GCC banks to structure relevant strategies to obtain, utilize, develop and retain IC. The findings also could help policy makers in GCC to formulate and implement policies for establishing a resilient banking sector.Originality/valueThis study adds to the literature by extending the knowledge of IC performance and its utilization for increasing the financial performance of GCC banks. There has only been one previous empirical study that explores the IC and its relationship with the traditional measures of bank performance in GCC region (only in Bahrain). It is the first comparative study across GCC countries.

In the GCC countries, date-palm sector is strategically important for the economic, social and environmental development. Therefore, markets globalization has had a huge impact on the comparative advantages of date exports from the GCC countries, highlighting a new range of necessary determinants for competitiveness of these countries on the international date palm date market. The current study is conducted in the framework of the “Development of sustainable date palm production systems in the GCC countries of the Arabian Peninsula” project funded by the Gulf Cooperation Council (GCC) and led by the International Center for Agricultural Research in the Dry Areas (ICARDA), and aims to provide updated estimates of competitiveness indicators of the GCC countries on the international market of date palm.The study starts by a summary description of updated figures concerning date’s production, yields, and consumption trends of the different GCC countries. This first part of the research paper also includes a presentation of the date trade matrix (destinations of exports and imports) of the considered countries. In a second part of this section, a set of competitiveness indicators were calculated to better reflect on the date trade balances performances of each of the GCC countries. The measures of competitiveness indicators conducted in this paper include: i) the Market Share (MS); ii) the Revealed Comparative Advantage (RCA); and iii) the Trade Balance Index (TBI). The Market share indicator was used to identify size advantages and the degree of specialization of a given country on the international market of a given commodity. The RCA has been defined as a measure of performance of international trade competitiveness of a given country for a given commodity. The TBI is used to analyze whether a country has specialization in export (as net-exporter) or in import (as net-importer) for a specific group of products. Data from both FAOSTAT and UN COMTRADE sources was used for the calculation of these indicators. Empirical findings show that GCC and North African countries are holding more than 70% of the international market of dates. The sum of market shares of the 6 GCC countries was about 30% of the international date market during 2015. This is showing that these countries together have strong potential for dominating the international date market. In terms of growth, it was clear that all GCC countries, including the least present on the international market are progressing quite positively with increasing shares from one year to another. In terms of RCA, the highest RCA value was recorded for Saudi Arabia (KSA). It was for about 43.5 in 2013, indicating that the country date export share for 2013 is 43.5% higher than its share in total world export of agricultural goods. Finally, TBI results show the existence of structural differences between KSA and UAE in terms of dates export and import patterns. These two countries are both the main players in date export in the GCC area. However, even though UAE is a net exporter of date palm, which its TBI is much lower than the TBI of KSA, showing that UAE is also importing a higher proportion of its exported dates compared to KSA. The date trade patterns among the GCC countries shows that there is a wide scope of coordination between the different trade strategies of these countries, through specialization and division of tasks. This can generate important opportunities for gaining more weight on the world market of dates.

This research paper examines the impact of water scarcity on agricultural output in the Gulf Cooperation Council (GCC) region. It highlights the increasing global water scarcity and its consequences, including the prevalence of water‐stressed areas and the adverse effects on human health and economic sectors. The paper focuses on the GCC region, known for its water scarcity and desertification, exacerbated by climate change and pollution. The study aims to investigate the relationship between water stress levels and agricultural productivity, evaluating the effects of freshwater withdrawals, fertilizer consumption, and agricultural methane emissions on crop production. Additionally, it explores the connection between agricultural output and net national income per capita. By addressing these research questions, the study contributes to the understanding of agricultural water scarcity and its implications for global food security and sustainability. The paper utilizes data from the World Bank to analyze crop production in the GCC countries from 2001 to 2020, shedding light on the influence of water scarcity on agricultural landscapes. The research highlights the efforts made by GCC countries to enhance food security, including strategic investments in agricultural lands and bilateral agreements. It also discusses the challenges faced by specific countries within the region, such as Saudi Arabia, the United Arab Emirates (UAE), and Kuwait, in terms of agricultural production and water constraints. Overall, the paper provides insights into the complexities of agricultural water scarcity and its effects on the GCC region, emphasizing the need for sustainable solutions to ensure food security and economic stability.

In terms of natural water resources, the GCC countries are ranked among the poorest and least secure in the world. During the past 50 years, and as a result of the oil boom, these countries have relied almost entirely on seawater desalination (reliance on desalination to produce freshwater in the GCC countries ranges from 50−90%) to meet the freshwater needs of the various consumption sectors. However, such reliance on desalination comes at a very high price. The extremely high capital and operational costs of seawater desalination have weighed heavily on the financial resources of these countries at the expense of other developmental plans and strategies. For example in Kuwait, the government spends 1.3 billion KD (US$4.55 billion) annually to operate and maintain water desalination and energy production plants. According to a recent study conducted by the Kuwait Institute for Scientific Research (KISR), Kuwait currently uses about 12% of its oil production to provide the fuel needed to operate these plants. This percentage is expected to increase to about 50% by 2050 (El-Sayed et al. 2010). In addition to the high financial burden, these plants pose a serious environmental threat in terms of gaseous emissions into the atmosphere (for example, seawater desalination and power generation plants in Kuwait emit 230 metric tons of nitrogen, sulphur and carbon annually into the atmosphere; El-Sayed et al. 2010). Furthermore, these plants are vulnerable to unexpected shutdowns and/or periodic maintenance, particularly in cases of seawater pollution, environmental catastrophes and war. Therefore, the GCC countries should relentlessly explore all possible avenues to find additional sources of freshwater supplies to meet the increasing demand. Despite its limited quantities and mostly poor quality, groundwater is an indispensable source of water for the GCC countries. It is used for blending with desalinated water to make it potable, as well as in numerous agricultural and some oil-related activities (with the need to enhance recovery and to produce heavy oil reserves, oil companies in the GCC countries are relying more and more on injecting either groundwater or steam produced from it into the oilbearing aquifers to increase their pressure and/or the mobility of oil, thereby increasing the quantity of oil produced). The aforementioned activities have resulted in a significant drop in the groundwater levels and deterioration of its quality. Treated wastewater is one of the emerging water resources in the GCC countries. Dependence on this source of water has increased significantly, particularly during the past few years. The produced water is used for agricultural and landscaping purposes as well as various non-potable activities. Despite the fact that this source of water is the only source that increases with the increase in population, its utilization has been constrained by the “impure” stigma attached to it.

PurposeThe purpose of this paper is to assess the potential of renewable energy as an essential future energy source in the Gulf Cooperation Council (GCC) region. This paper summarizes the main projects and measures established to start the transition toward renewable energy. The opportunities and challenges for developing renewable energy projects have been discussed to reach a better understanding of the future of renewable energy in the region.Design/methodology/approachThe paper provides a literature-based study on the status of the renewable energy sector in the GCC, including potentials, projects, targets and strategies. The opportunities and challenges of the development of renewable energy sources in the GCC region have been discussed based on the literature.FindingsThe paper shows that the GCC countries have begun to adopt a more proactive approach toward renewable energy, while the reorientation of strategies and plans for renewable energy is evolving in these countries. All of the GCC countries focus on solar and wind energies and plan to invest in waste-to-energy (WtE), while only Saudi Arabia is interested in going for geothermal.Originality/valueThe paper contributes to the provision of an extensive literature review on the development of renewable energy in the GCC countries. It provides an updated and comprehensive overview of the region’s renewable energy potential and highlights the main renewable energy strategies and targets. This paper targets regional decision-makers as well as multilateral stakeholders to formulate a set of recommendations to promote renewable energy deployment and improve industrial capabilities.

Purpose: The study aims to explore the factors that have led to a significant shift in consumer behavior from traditional shopping methods to e-shopping in the Gulf Cooperation Council (GCC) countries, particularly in the aftermath of the COVID-19 pandemic. It seeks to identify and analyze the various elements that contribute to consumers' growing preference for online shopping and to understand how this trend is reshaping the retail landscape in the GCC region. Theoretical Framework: The research is anchored in the theory of consumer behavior and the Technology Acceptance Model (TAM), like perceived usefulness, consumer psychology, ease of payment, budget considerations, health issues, and cultural and traditional values which helps in understanding the factors influencing consumers' acceptance and use of technology, in this case, e-shopping platforms. Design/Methodology/Approach: This study adopts a mixed-method approach, combining quantitative data from structured online consumer surveys and qualitative insights from expert interviews. The authors used the PLS-SEM approach to investigate the survey of 380 responses to examine the impact of various factors on e-shopping behavioral intention among consumers in the GCC countries. Findings: The findings reveal that perceived usefulness, consumer psychology, ease of payment, budget considerations, health issues, and cultural and traditional values significantly and positively impact the e-shopping behavioral intention of consumers. However, product variety does not significantly influence the e-shopping behavioral intention in the GCC region. Research, Practical & Social Implications: The study opens new avenues for research in consumer behavior and e-commerce, especially in the context of unforeseen global events like pandemics. The insights are valuable for retailers, e-commerce platforms, and marketers in the GCC region for strategizing and aligning with changing consumer preferences. It aids in developing targeted marketing strategies and enhancing the online shopping experience. Originality/Value: This research offers original insights into the shift towards e-shopping in the GCC region post-COVID-19. It contributes to the broader discourse on consumer behavior in the context of pandemics and technological acceptance, providing a region-specific perspective that enhances understanding in this field.

Purpose This study investigates the implications of corporate board international diversity by exploring how foreign directors influence corporate dividend policies in the emerging economies of the Gulf Cooperation Council (GCC) region. Design/methodology/approach This study analyses nonfinancial firms in the GCC region from 2010 to 2020. It uses various dividend policy proxies and measures of international board diversity using the modified Kanter’s framework. The modified Kanter framework categorises boards based on the proportion of foreign directors into uniform, skewed, tilted and balanced. The study deploys a wide range of estimation methods, including pooled, random effect, generalised least squares (GLS), generalised method of moments (GMM), two-stage least squares (2SLS), logit and probit regression, to analyse the data while controlling for relevant firm-specific characteristics. Findings GCC firms exhibit a low representation of foreign directors in their boardrooms. Those firms with foreign directors experience an average dividend payout ratio of 54% higher than those without foreign directors. Likewise, foreign directors enhance the dividend policy for firms in the GCC countries. Besides, the analysis based on the modified Kanter’s framework evidence that both the skewed and tilted boards, which have moderate-level foreign directors, have distinctly positive impacts on the degrees of dividend payouts, thus underlining those the efficient dividend decisions, depending on the boards, require a balance in the international diversity. Research limitations/implications The findings provide valuable insights to policymakers and investors. They highlight the need for governance reform to improve the international diversity of corporate boards in GCC firms. Likewise, investors in the GCC region should rely on such specific governance attributes (i.e. international diversity) to build their prospects regarding corporate dividend policies. Practical implications GCC firms should organise their boards to include international directors to increase supervision, reduce agency expenses and strengthen external links. Second, GCC firms should foster a welcoming culture to capitalize on foreign experience and implement additional corporate governance measures. Third, policymakers should establish regulations to ensure the presence of foreign directors on corporate boards. This may reduce agency costs and eventually boost investor trust. Finally, as board members become more acquainted with one another, the beneficial implications of optimization for board international diversity grow. This parallels their thinking and decision-making, contributing to developing more sustainable dividend programmes. Social implications The findings encourage companies to consider broader cultural backgrounds in leadership, which can drive more inclusive and socially responsible policies. This approach promotes the integration of global insights into local business practices, supporting economic and social development by aligning corporate strategies with the diverse needs of communities and stakeholders. Originality/value Apart from developed economies, the current study is the first evidence of how the board of directors’ international diversity could affect the GCC countries’ corporate dividend policy. In addition, the current study introduces a relatively novel variable – international diversity – instead of commonly examined diversity variables such as gender diversity.