THE EFFECT OF OWNERSHIP AND MANAGEMENT ON THE FINANCIAL PERFORMANCE OF THE EGYPTIAN CONTRACTORS

Abstract

The Egyptian construction market consists of several contractors that belong to a number of different ownership and management types. These different management types might influence the financial performance of the contractors. Generally, these types are limited to the state and privately-owned ones; however, these two main categories are also subdivided into further sub-categories. As a result, the need to identify these types and assess their financial performance to determine the most efficient one arose. Nevertheless, none of the previous studies aimed at examining the financial performance of the Egyptian contractors took the further step in linking these performances with their respective management types. Furthermore, most of these studies assessed the historical financial performance using a large set of financial ratios. This study took this further step and linked the financial performance with the management types; and to do so, the different ownership and management types present in the Egyptian construction market were identified. Moreover, this study did not evaluate the historical financial performance of the contractors, but it developed a financial forecasting model by which the future expected financial performance of the Egyptian contractors can be evaluated using the shareholder value technique. According to this study, it was found out that the financial performance of Egyptian contractors differs according to their management types.