Hamburg Financial Research Center

Omrane Guedhami

Professor
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Curriculum Vitae

Dr. Omrane Guedhami is a Moore Research Fellow and a Professor of International Finance at the Moore School of Business at the University of South Carolina. Dr. Guedhami earned his M.Sc. in finance from HEC Montreal in 1998 and received his Ph.D. in finance from Laval University in 2003. ​ Dr. Guedhami’s research interests are international, covering corporate governance, privatization, national culture, and corporate social responsibility. Specifically, his research examines the determinants of postprivatization performance changes, the impact of privatization on corporate governance and ownership structure, the determinants of ownership structure of newly privatized and public firms, and the role of large blockholders and tax enforcement in corporate governance. His research on corporate social responsibility (CSR) focuses on the determinants and economic consequences of firms’ CSR initiatives. His research has been published in leading academic journals such as the Journal of Financial Economics, Journal of Financial and Quantitative Analysis, Journal of Accounting Research, the Journal of Accounting and Economics, Management Science, Contemporary Accounting Research, Review of Finance, Journal of International Business Studies, Accounting, Organization, and Society, Journal of Business Ethics, among others. He received several research distinctions and prestigious awards, including the 2003 Best Dissertation in International Finance Case Award sponsored by Indiana University Center for International Business Education and Research and Financial Management Association International, the Best Paper Award in International Finance at the 2007 Eastern Finance Association Meeting, the 2011 Moskowitz Prize for Socially Responsible Investing (Center for Responsible Business, Haas School of Business, University of California, Berkeley), the Best Paper Award at the 2011 China Goes Global Conference (Harvard Kennedy School), the Best Paper Award in Financial Institutions at the 2012 Southwestern Finance Association Conference, the Outstanding Paper Award “Collectivism and Corruption in Bank Lending”, the Outstanding Paper Award at the 2012 and 2013 International Conference on Asia-Pacific Financial Markets, and the 2015 Emerald Citations of Excellence Award. In April 2011, he received the Rising Star Award from the Office of Research at the University of South Carolina. His research is funded by Canada’s Social Sciences and Humanities Research Council. Dr. Guedhami taught at Laval University and Memorial University of Newfoundland before joining the Moore School of Business in 2007. He teaches financial management, investments, international corporate governance, and international finance at the undergraduate, graduate and doctoral levels. He was voted Finance Professor of the Year in 2005 and MIB Professor of the Year in 2013. He is currently the coordinating director of the Ph.D. program in International Finance. Dr. Guedhami is a member of the editorial boards of major journals, such as Contemporary Accounting Research and the Journal of International Business Studies, and is currently serving as Editor at the Journal of Business Ethics, Corporate Governance: An International Review, Emerging Markets Review, and Associate Editor of the Journal of Corporate Finance, Journal of Financial Stability, the Journal of International Accounting Research, and the Journal of Applied Accounting Research.

Ausgewählte Publikationen

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Board ancestral diversity and voluntary greenhouse gas emission disclosure

Johannes Barg, Wolfgang Drobetz, Sadok El Ghoul, Omrane Guedhami, Henning Schröder
British Journal of Management | 08/2023 | Forthcoming
This paper examines the relationship between board diversity and firms’ decisions to voluntarily disclose information about their greenhouse gas (GHG) emissions. We focus on board ancestral diversity as a relatively new dimension of (deep-level) board structure and document that it has a positive and statistically significant effect on a firm’s scope and quality of voluntary GHG emission disclosure. The effect goes beyond the impact of more common (surface-level) dimensions of board diversity and remains robust after addressing endogeneity concerns. In line with the theoretical conjecture that diversity enhances a board’s advising and monitoring capacity, we find that the impact of diverse boards is stronger in more complex firms and in firms with low levels of institutional ownership. Overall, our findings provide evidence for board diversity being a relevant governance factor in corporate environmental decision making.

Cross-country determinants of institutional investors’ investment horizons

Wolfgang Drobetz, Simon Döring, Sadok El Ghoul, Omrane Guedhami, Henning Schröder
Finance Research Letters | 06/2020 | Forthcoming
Using a large dataset of firms from 35 countries, we study the country-level determinants of institutional investors’ investment horizons. We show that an equity investor-friendly institutional environment is more important for long-term investors, while short-term investors seem to be less concerned about the quality of the financial and legal environment. Beyond the financial and legal structure, the cultural environment and economic policy uncertainty in a country are other important determinants of investor horizons. These findings improve our understanding of cross-country differences in the corporate governance role, i.e., engagement vs. exit, of institutional investors.

Do foreign institutional shareholders affect international debt contracting? Evidence from yankee bond covenants

Paul Brockman, Wolfgang Drobetz, Sadok El Ghoul, Omrane Guedhami, Ying Zheng
Journal of International Business Studies | 09/2023 | Forthcoming
The international bond market is the largest component of the international capital market. Previous research shows that the liability of foreignness (LOF) imposes significant costs on international debt contracting. The purpose of this study is to examine the impact of foreign institutional shareholders (FISs) on the costs of international debt contracting. While the presence of FISs could lead to a reduction in LOF-related costs, it can also lead to an increase in the costs arising from agency conflicts between shareholders and bondholders. We examine the impact of FISs on the prevalence of restrictive bond covenants using a sample of 956 Yankee bonds from 26 countries over the period 2001–2019. We find a significantly negative relation between FIS ownership and bond covenants. This inverse relation is strongest for U.S. institutional ownership of Yankee bonds, and for covenants designed to mitigate opportunistic behavior such as claim dilution and wealth transfers. We also show that the inverse relation between U.S. institutional ownership and restrictive bond covenants is moderated by country- and firm-level variables related to corporate governance, information asymmetry, and agency costs of debt. Additional analyses show that U.S. institutional ownership has a significant pricing effect on Yankee bond investors by lowering an issuer’s cost of borrowing.

Foreign institutional investors, legal origin, and corporate greenhouse gas emissions disclosure

Wolfgang Drobetz, Simon Döring, Sadok El Ghoul, Omrane Guedhami, Henning Schröder
Journal of Business Ethics | 01/2023
The disclosure of corporate environmental performance is an increasingly important element of a firm’s ethical behavior. We analyze how the legal origin of foreign institutional investors affects a firm’s voluntary greenhouse gas emissions disclosure. Using a large sample of firms from 36 countries, we show that foreign institutional ownership from civil law countries improves the scope and quality of a firm’s greenhouse gas emissions reporting. This relation is robust to addressing endogeneity and selection biases. The effect is more pronounced in firms from non-climate-sensitized countries, for which the gap between firms’ environmental standards and investors’ environmental targets is potentially larger, and in less international firms. Firms with a higher level of voluntary greenhouse gas emissions disclosure also exhibit higher valuations.

Institutional investment horizons and firm valuation around the world

Wolfgang Drobetz, Simon Döring, Sadok El Ghoul, Omrane Guedhami, Henning Schröder
Journal of International Business Studies | 09/2020 | Forthcoming
Using a comprehensive dataset of firms from 34 countries, we study the effect of institutional investors’ investment horizons on firm valuation around the world. We find a positive relation between institutional ownership and firm value that is driven by short-horizon institutional investors. Accounting for the interaction between investors’ investment horizon and nationality, we show that foreign short-horizon institutions, which are more likely to discipline managers through the threat of exit rather than engaging in monitoring made costly by the liability of foreignness, are the investor group with the strongest effect on firm value. Reinforcing the threat of exit channel, we find that the value-enhancing effect of short-horizon investors is stronger in the presence of multiple short-horizon investors, who are more likely to engage in competitive trading. The positive valuation effect of short-horizon investors is stronger when stock liquidity is high, which makes the exit threat more credible, and in firms prone to free cash flow agency problems. Overall, our results are consistent with short-horizon institutional investors, especially foreign institutional owners, affecting firm value by disciplining managers through a credible threat of exit.

Institutional investment horizons, corporate governance, and credit ratings: International evidence

Hamdi Driss, Wolfgang Drobetz, Sadok El Ghoul, Omrane Guedhami
HFRC Working Paper Series | Version 01/2021
Using a comprehensive set of firms from 57 countries over the 2000–2016 period, we examine the relation between institutional investor horizons and firm-level credit ratings. Controlling for firm- and country-specific factors, as well as for firm fixed effects, we find that larger long-term (short-term) institutional ownership is associated with higher (lower) credit ratings. This finding is robust to sample composition, alternative estimation methods, and endogeneity concerns. Long-term institutional ownership affects ratings more during times of higher expropriation risk, for firms with weaker internal governance, and for those in countries with lower-quality institutional environments. Additional analysis shows that long-term investors can facilitate access to debt markets for firms facing severe agency problems. These findings suggest that, unlike their short-term counterparts, long-term investors can improve a firm’s credit risk profile through effective monitoring.

Institutional investors and corporate environmental costs: The roles of investment horizon and investor origin

Wolfgang Drobetz, Sadok El Ghoul, Zhengwei Fu, Omrane Guedhami
European Financial Management | 06/2023 | Forthcoming
Using a large international dataset that quantifies corporate environmental costs, we analyze the influence of institutional investor ownership, particularly investment horizon and investor origin, on the monetized environmental impact generated by their investee firms. Institutional investor ownership is negatively related to corporate environmental costs. This effect is driven by long-term foreign institutional investors, especially investors from advanced economies. Foreign institutional investors transfer higher norms and standards from their home countries to their investee firms abroad. Corporate environmental costs are negatively correlated with firm valuation and positively correlated with the firm’s cost of equity. To the extent that corporate environmental costs are not already reflected in conventional ESG ratings, our results shed new light on the role of institutional investors in shaping corporate environmental impact.

Policy uncertainty, investment, and the cost of capital

Wolfgang Drobetz, Sadok El Ghoul, Omrane Guedhami, Malte Janzen
Journal of Financial Stability | 11/2020
We examine the effect of economic policy uncertainty on the relation between investment and the cost of capital. Using the news-based index developed by Baker et al. (2016) for twenty-one countries, we find that the strength of the negative relation between investment and the cost of capital decreases during times of high economic policy uncertainty. An increase in policy uncertainty reduces the sensitivity of investment to the cost of capital most for firms operating in industries that depend strongly on government subsidies and government consumption as well as in countries with high state ownership. Consistent with the price informativeness channel, we find that an increase in policy uncertainty reduces the investment-cost of capital sensitivity for firms from more opaque countries, firms with low analyst coverage, firms with no credit rating, and small firms. We conclude that economic policy uncertainty distorts the fundamental relation between investment and the cost of capital.