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Abstract
This study examines the impact of two non-GAAP profitability measures—earnings before interest, tax, depreciation, and amortization (EBITDA) and earnings before interest and tax (EBIT)—on investment intensity in Gulf Cooperation Council (GCC) countries. Panel data regressions (205 firms, 2010–2019) reveal a positive association between EBITDA and investment intensity across all GCC countries, but a negative association with EBIT. Foreign investors show a preference for EBITDA when making investment intensity decisions. The study suggests that regulators and investors should utilize EBITDA information to improve investment decisions and resource allocation.
Publisher
Humanities and Social Sciences Communications
Published On
Feb 27, 2023
Authors
Mawih Kareem AL Ani, Kavita Chavali
Tags
EBITDA
EBIT
investment intensity
GCC countries
foreign investors
panel data
profitability measures

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