Corporate governance, tourism growth and firm performance: Evidence from publicly listed tourism firms in five Middle Eastern countries

This study explores the under-researched relationship between corporate governance and firm performance in tourism companies. We employ instrumental variable modelling using 2SLS for publicly listed firms in five countries in the Middle East. Board independence is found to be positively related to firm performance and stock performance, suggesting that having independent directors among board members will improve overall firm performance. Board size shows opposing results: large boards enhance firm profitability; however, small boards exhibit more efficient stock performance. Finally, we support the tourism-led-growth hypothesis in our selected sample. These findings have empirical implications for policy makers, governments and academics. (C) 2013 Published by Elsevier Ltd.