• The Journal of Asian Finance, Economics and Business
• /
• 제8권7호
• /
• pp.245-254
• /
• 2021

This paper examines the impact of corporate governance strength on capital structure in an emerging country, namely, Jordan, by constructing a corporate governance score that captures both internal monitoring mechanisms (foreign ownership and institutional ownership) and external monitoring mechanism (audit fees). In addition, this study uses profitability as control variable. This paper uses data of non-financial companies (industrial and services) of 87 listed firms on Amman Stock Exchange (ASE) from 2011 to 2019. Using the random-effects generalized least square (GLS) regression model, the findings reveal that foreign ownership significantly and negatively influences the level leverage, while institutional ownership has a positive and insignificant association with level leverage. Further, audit fees have a positive and strong significant association with level leverage in Jordan. In addition, profitability has a positive and significant association with leverage. These outcomes suggest that foreign ownership should be encouraged in listed companies as it can replace the weakness of other corporate governance mechanisms in Jordan. The outcomes of the current study should be of great interest to regulators and policy-makers. The results, which are robust to a range of alternative proxies and to additional tests, provide new insights into the determinants of level leverage.

• The Journal of Asian Finance, Economics and Business
• /
• 제8권8호
• /
• pp.453-463
• /
• 2021

The current study aims to investigate the relationship between CSRD and firm performance, as an indicator for corporate socially responsible behavior, and corporate market performance of listed companies on the Amman stock exchange (ASE). The study adopts a quantitative methodology and utilizes pooled data sets that was collected following content analysis approach of the annual reports for the period 2014 to 2019. The study sample consists of 42 listed companies. The study ran a multiple regression model in order to capture the relationship between the independent variable CSRD and the dependent variable that is Firm performance which was measured using Tobin's Q. The study also utilized five control variables in order to control the hypothesized relationship between CSRD and Firm Performance. The results indicate a negative but significant relationship between CSRD and corporate market performance measured by Tobin's Q. The results stand against the notion of the business case for CSR, and indicate the opposite position, so, the higher CSRD, the lower will be Tobin's Q. Such results support the notion of the institutional theory, and provide an initial evidence for legitimacy seeking behavior in Jordanian companies. However, the results indicate a lower level of awareness of CSR across investors and market players, which support arguments of the difference in market perceptions towards CSR.

• The Journal of Asian Finance, Economics and Business
• /
• 제10권2호
• /
• pp.163-174
• /
• 2023

This study aims to investigate the effect of the composition of the board and ownership structure on a firm's value in Jordanian firms. Specifically, it aims to determine the effect of board size, (CEO) duality, and family, foreign, institutional, and government ownership on a firm's value. An ordinary least square regression (OLS) was employed to examine the study hypotheses in a sample of 35 Jordanian industrial firms (175 firm-year observation) for a period of five years from 2016-2020. As measured by Tobin's Q (Q ratio) and market-to-book (MB ratio) for Jordanian industrial firms listed on Amman Stock Exchange (ASE). The result found that foreign ownership, institutional ownership, and family ownership have a significant and positive effect on firm value. By contrast, government ownership does not have a significant effect on firm value. With respect to board composition (CEO duality and board size), the study results found no evidence to support the effect of board composition on firm value. The study recommended the concerned authorities with several recommendations, most notably: taking the necessary measures to ensure the continuity and growth of family businesses because of their positive impact on the value of the company and economic growth, spreading awareness about how governance protects the interests of investors.

• The Journal of Asian Finance, Economics and Business
• /
• 제10권2호
• /
• pp.135-143
• /
• 2023

This study seeks to ascertain whether publicly listed Jordanian corporations (listed on the Amman Stock Exchange (ASE)) exhibit accounting conservatism and whether such companies distribute dividends to stockholders. Furthermore, this study delves into the implications of accounting conservatism on dividend policy in the context of the quality of financial statements of publicly listed Jordanian companies listed on the ASE. To accomplish the aims of this study, the Quality of financial reporting is treated as a moderator for the relationship between accounting conservatism and dividend distribution. Hence, a panel data approach was utilized, which encompasses cross-sectional data for 95 industrial and service establishments for the period (2013-2017). The study found that accounting conservatism has a negative impact on dividends and that there is no difference in the impact of accounting conservatism on dividends based on the quality of financial reports. The study concluded with a number of recommendations, the most salient of which is the need for companies to enhance their concentration on accounting conservatism and adopt a suitable policy for dividends. Thus, this research provides an insights into the financial practices of Jordanian publicly listed corporations and highlights the need for a more informed decision-making process concerning dividends and accounting practices.