Foreign Ownership and Financial Performance: Evidence from Egypt

With the use of a panel of 8,185 companies in Egypt for the period 2006-2010, we examine the relationship between the degree of foreign ownership and financial performance. The results show that foreign ownership is positively associated with firm's return on assets (ROA), return on equity (ROE) and debt ratio (DR). When comparing the effect of various degrees of foreign ownership on financial performance, we find that foreign ownership increases financial performance up to a level and then declines. Our findings indicate that the effect of foreign ownership is sector-specific.