Earnings Quality and Foreign Investors in Gulf Cooperation Council Countries


  • Mawih Kareem Al Ani Dhofar University




Earnings quality, Earnings quality proxies, Foreign investor, Emerging market, Gulf Cooperation Council


This study aims to measure the earnings quality (EQ) in the Gulf Cooperation Council (GCC) countries using a sample of 1827 firm-year observations from 2008 to 2016 by using nine EQ measures. These measures are persistence, predictability, value relevance, earnings response coefficient (ERC), smoothness, earnings surprise, accrual quality, loss recognition timeliness and conservatism. The study also examines the effect of these nine EQ measures on attracting foreign investors. Data are collected from Capital IQ database, and some other data are calculated manually from the capital markets and firms in each country. In this quantitative research, the sample is analysed by using descriptive statistics, correlation, and generalized least squares (GLS) regression to verify the hypotheses and analyse the effect of EQ measures on attracting foreign investors. Findings show distinct effects on attracting foreign investors in different countries. Persistence, predictability, ERC, and accrual quality have a positive effect in Oman, whereas value relevance and ERC have a positive effect in Kuwait. Predictability, accrual quality, ERC, and conservatism negatively affect the Kingdom of Saudi Arabia. Finally, loss recognition timeliness, smoothness, and earnings surprise do not have any effect in all GCC countries.

Author Biography

Mawih Kareem Al Ani, Dhofar University

Dr. Mawih Kareem Al Ani is currently an associate professor of accounting at the College of Commerce and Business Administration in Dhofar University in Oman. His research interests focus on earnings quality, conservatism and audit quality. He has published articles in international journals, such as Borsa Istanbul Review, International Journal of Economic, Management and Accounting, Business: Theory and Practice, Future Business Journal and many other indexed journals.




How to Cite

Al Ani, M. K. (2021). Earnings Quality and Foreign Investors in Gulf Cooperation Council Countries. Contemporary Management Research, 17(3), 223–270. https://doi.org/10.7903/cmr.20575