Do CEO characteristics attract government investment? Empirical evidence from GCC<i>Shariah</i>-compliant companies

Purpose This study aims to empirically explore the effects of chief executive officer (CEO) characteristics on attracting government investment (GI) within Shariah-compliant companies in the Gulf Cooperation Council (GCC) countries. Shariah compliance is an important characteristic of companies in the GCC. Companies seeking to be “Shariah-compliant” must adhere to the restrictions imposed by Islamic law, in addition to any secular national laws that apply in the workplace. Design/methodology/approach A sample of 116 non-financial companies adhering to Islamic law listed in GCC financial markets was used, comprising 1,166 observations. This study uses the OLS panel data method, with supplementary tests using the 2SLS method. Findings This study reveals several significant outcomes. GI in the GCC region correlates negatively with CEO foreign nationality, CEO ownership, CEO family ties and CEO board membership. Conversely, CEO tenure and CEO political connections demonstrate positive impacts on GI. Practical implications This study helps understand the role CEO characteristics play in companies’ compliance with Shariah law and its impact on attracting GI. The study also provides policymakers in Shariah-compliant companies with useful indicators that focus on ethical aspects and Shariah expertise, helping them select CEOs beyond traditional criteria (education, work experience, age and nationality). Furthermore, this study is useful for investors to assess the impact of Shariah-compliant restrictions on a company’s investment attraction process. At the academic level, the study opens the door for further research in countries focused on corporate compliance with Shariah, examining the relationship between executives and Shariah compliance and its impact on corporate performance. Originality/value This study pioneers research by examining the impact of six distinct CEO characteristics on attracting GI. Furthermore, this research innovates by investigating this critical topic within Shariah-compliant companies in the unique emerging market of the GCC region.