The Effect of Strength of Auditing and Accounting Standards and Corporate Governance on Economic Growth: A Case Study of the Islamic World
Main Article Content
Abstract
The purpose of this paper is to determine the effect of corporate governance on the economic growth of Muslim countries and demonstrate that the Strength of Auditing and Accounting Standards is the most crucial component of corporate governance and thus has the most effect on economic growth. We will use the Strength of Auditing and Accounting Standards, Conflict of Interest Regulation, and Shareholders Governance to determine the level of corporate governance. The data was collected from the Global Competitiveness Index 4 for 2019 and the World Bank for the Muslim countries for the year 2019. The Least Squares Regression analysis is used to determine the effect of corporate governance on the GDP per Capita for a number of Muslim countries. Our analysis had indicated that one unit increase in corporate governance results in a 0.05 unit increase in the GDP per Capita. Our analysis had also indicated that a one unit increase in Strength of Auditing and Accounting Standards results in a 0.06 unit increase in the GDP per Capita. Thus both corporate governance and Strength of Auditing and Accounting Standards have a positive effect on economic growth for Islamic world.
Article Details
References
Al – haddda, W. Al zurqan , S. and Al Sufy , F. (2011), "The Effect of corporate governance on the performance of Jordanian companies: An empirical study on Amman stock exchange", international journal of humanities and social science, vol.1No.4,p55-69.
Al-Hajri, M. O. (2018). Corporate Governaqncde and Auditor Choice in Kuwait. Studies in Businesss and Economics, 21 (1), 27-51.
Claessens, S. (2006). Corporate Governance and Develpp[,emt. World Bank Research Observer, 21 (1), 91-122.
El-Chaarani, H. (2014). The Impact of Corp0rate Governance on the Performance of Lebanese Banks. The International Journal of Business and Finance Research, 8 (5), 35-46.
Gunay, S. G. (2008). Corporate Governaqnce Theory -A Comparative Analysis of Shareholder & Stakehopl;der Governance Model. Bloomington, NY: IUnivers Inc.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3 (4), 305-360.
Jones, M. (2011). Creative Accounting, Fraud and International Accountings Scandals. New York: Wiley.
Maune, A. (2017). The Strength of Sound Corporate Governance on Economic Growth in an Emerging Market Context. International Journal of Economics and Financial Issues, 7 (5), 6-13.
Mueller, D. C. (2006). Corporate Governance and Economic Performance. Internatiopnal Review of Applied Economics, 20 (5), 623-643.
Quirk, P. J. (1987). Intermediate Microeconomics (Third Edition ed.). Science Research Associates.
Rivera-Batiz, F. (2002). Democracy, Governance and Economic Growth: Theory and Evidence. Review of Development Economics, 6 (2), 225 - 247.
Samarah, W. A. (2018). The Effect of Governance on Economic Growth in Palestine. Journal of Al-Quds Open University for Administrative and Economic Research, 3 (9), 11-23.
Samarah, W. A. (2017). The Palestinian Economy and the Arab Spring. Middle East Review of Public Administration, 3 (2), 1-9.
Samarah, W. A., (2016). The Relationship Between Consumption and Gross Disposable Income and Estimating the Consumption Function for Palestine, IUG Journal of Economics and Business, 24(2), 18-29.
Skare, M., & Hasic, T. (2016). Corporate Governancde, Firm Performance, and Economic Growth -Theoretical Analysis. Journal of Business Economics and Management, 17 (1), 35-51.
Tiwari A .K., (2010). Corporate Governancde and Economic Growth, - Journal of Economics Bulletin, 30(4),.2825-2841.