This paper examines the relationship between corporate governance, ownership structures, and firm performance in Jordan's emerging market. Jordan presents a unique case study due to its dynamic environment and concentrated ownership, with over 60% of companies owned by the state and families. The review synthesizes recent empirical evidence on various ownership types in Jordanian firms. It analyzes their impact on financial and market performance, as well as the moderating effect of board characteristics. The study employs a literature review approach, drawing from recent peer-reviewed articles, regulatory documents, and empirical papers focused on Jordan. Key findings indicate that institutional ownership enhances firm performance across industries, improving governance and strategic management. Government involvement shows a nuanced effect, with moderate involvement positively correlated with performance, while high involvement has a negative impact. Foreign control generally proves beneficial, particularly in banking and insurance sectors, bringing fresh perspectives and international experience. Ownership concentration demonstrates both positive monitoring effects from large shareholders and negative entrenchment effects at high levels. The review also explores how board characteristics influence the performance-ownership relationship. Research implications span theoretical advancements, government policy recommendations for Jordan and other emerging markets, and investment strategies. The paper acknowledges limitations and suggests areas for future research, including longitudinal studies, sector-specific investigations, and improved measurement of ownership effects. This comprehensive analysis aims to assist academics, regulators, and managers in enhancing corporate governance processes to improve firm performance in Jordan and comparable economies.
Abbadi, S. S., Hijazi, Q. F., & Al-Rahahleh, A. S. (2016). Corporate governance quality and earnings management: Evidence from Jordan. Australasian Accounting, Business and Finance Journal, 10(2), 54-75.
Aguilera, R. V., & Crespi-Cladera, R. (2016). Global corporate governance: On the relevance of firms' ownership structure. Journal of World Business, 51(1), 50-57.
Aguilera, R. V., & Cuervo-Cazurra, A. (2004). Codes of good governance worldwide: What is the trigger? Organization Studies, 25(3), 415-443.
Alabdullah, T. T. Y. (2018). The relationship between ownership structure and firm financial performance: Evidence from Jordan. Benchmarking: An International Journal, 25(1), 319-333.
Alabdullah, T. T. Y. (2021). Government ownership, firm performance, and the moderating role of board management in Jordan. International Journal of Finance & Economics, 26(4), 5092-5110.
Alabdullah, T. T. Y. (2021). Management accounting and service companies' performance: research in emerging economies. Journal of Accounting and Organizational Change, 17(4), 515-536.
Al-Abrrow, H., Al-Maatoq, M., Alharbi, R. K., Alnoor, A., & Abdullah, H. O. (2021). The impact of ownership structure and board characteristics on firm performance: Evidence from Jordan. Journal of Accounting and Management Information Systems, 20(2), 198-225.
Al-Akra, M., Eddie, I. A., & Ali, M. J. (2010). The association between privatization and voluntary disclosure: Evidence from Jordan. Accounting and Business Research, 40(1), 55-74.
Al-Amarneh, A. (2023). Ownership structure and dividend policy: Evidence from an emerging market. Journal of Governance and Regulation, 12(1), 75-83.
Al-Daoud, K. I., Saidin, S. Z., & Abidin, S. (2016). Board characteristics and earnings management among Jordanian listed companies: Proposing conceptual framework. Asian Journal of Accounting and Governance, 7, 89-99.
Al-Fayoumi, N., Abuzayed, B., & Alexander, D. (2010). Ownership structure and earnings management in emerging markets: The case of Jordan. International Research Journal of Finance and Economics, 38(1), 28-47.
Al-Haddad, L., Albuquerque, R., & Azevedo, A. (2023). Does corporate governance influence firm performance? Evidence from Jordan. International Journal of Accounting & Information Management, ahead-of-print.
Al-Haddad, L., Salameh, A., & Altarawneh, I. (2023). The impact of foreign ownership on bank performance: The moderating role of board financial expertise. International Journal of Managerial Finance, ahead-of-print.
Alkurdi, A., Hamad, A., Thneibat, H., & Elmarzouky, M. (2021). Ownership structure's effect on financial performance: An empirical analysis of Jordanian listed firms. Cogent Business & Management, 8(1), 1939930.
Almaharmeh, M., & Masa'deh, R. (2023). Foreign ownership and bank performance: Evidence from Jordan. Banks and Bank Systems, 18(1), 175-184.
Almaharmeh, M., Abumustafa, N., & Alshare, K. (2022). The impact of ownership structure on firm performance: Evidence from Jordan. Journal of Financial Reporting and Accounting, ahead-of-print.
Al-Malkawi, H. A. N., & Pillai, R. (2018). Analyzing the impact of ownership structure on dividend policy in emerging markets: Evidence from the UAE. International Journal of Managerial Finance, 14(1), 34-51.
Almanasir, A. H. A., & Shivaraj, B. (2020). Ownership structure, board characteristics, and firm performance: Evidence from Jordan. International Journal of Entrepreneurship and Small Business, 40(2), 220-243.
Almarayeh, T. (2023). Ownership structure, board diversity, and earnings management: Evidence from Jordan. International Journal of Accounting & Information Management, ahead-of-print.
Al-Najjar, B. (2010). Corporate governance and institutional ownership: evidence from Jordan. Corporate Governance: The International Journal of Business in Society, 10(2), 176-190.
Al-Najjar, B., & Al-Amarneh, A. (2023). Foreign ownership and corporate social responsibility disclosure: Evidence from an emerging market. Journal of Governance and Regulation, 12(1), 8-19.
Al-Najjar, B., & Kilincarslan, E. (2016). The effect of ownership structure on dividend policy: Evidence from Turkey. Corporate Governance: The International Journal of Business in Society, 16(1), 135-161.
Al-Nsour, O. J., & Jresat, S. (2022). The impact of institutional ownership on dividend policy and firm value: Evidence from Jordan. Journal of Asian Finance, Economics and Business, 9(5), 47-58.
Al-Qadasi, A., Abidin, S., & Al-Jabri, H. (2022). The moderating role of audit committee characteristics on the relationship between institutional ownership and firm performance: Evidence from Jordan. Cogent Business & Management, 9(1), 2022260.
Al-Qaisi, F., Ayoush, M., & Khalaf, B. (2021). The impact of ownership concentration on the financial performance of listed Jordanian industrial companies. Investment Management and Financial Innovations, 18(4), 114-125.
Alqatamin, R. M. (2023). Institutional ownership and firm performance: The moderating role of CEO duality in Jordan. Journal of Financial Reporting and Accounting, ahead-of-print.
Alqirem, R., Abu Afifa, M., Saleh, I., & Haniah, F. (2022). Ownership structure, earnings manipulation, and organizational performance: the case of Jordanian insurance organizations. Journal of Asian Finance, Economics and Business, 7(12), 293-308.
Al-Qudah, A. M., Almawali, N., & Al-Shibly, M. (2021). The impact of foreign ownership on financial performance: Evidence from Jordan. Journal of Asian Finance, Economics and Business, 8(5), 143-153.
Al-Rahahleh, A. S. (2022). Ownership structure, board gender diversity, and firm performance: Evidence from an emerging market. Journal of Governance and Regulation, 11(1), 65-75.
Al-Rdaydeh, M. (2022). The impact of ownership structure on firm performance: Evidence from Jordanian industrial companies. International Journal of Financial Research, 13(3), 174-185.
Al-Rdaydeh, M., Almansour, A. Y., & Al-Omari, M. A. (2021). The moderating effect of foreign ownership on the relationship between earnings management and firm performance: Evidence from Jordan. Journal of Financial Reporting and Accounting, 19(2), 299-319.
Al-Rdaydeh, M., Almansour, A. Y., & Al-Omari, M. A. (2022). Ownership structure, dividend policy, and firm value: Evidence from Jordan. International Journal of Monetary Economics and Finance, 15(1), 50-69.
Al-Rjoub, A. M., Alsharari, N. M., & Al-Qudah, A. M. (2021). The effect of ownership structure on the insurance companies' performance: Evidence from Jordan. Cogent Business & Management, 8(1), 1939930.
Al-Shattarat, W. K., Al-Shattarat, B. K., & Hamed, R. (2022). The impact of foreign ownership on firm performance: Evidence from an emerging market. Journal of International Accounting, Auditing and Taxation, 47, 100442.
Al-Smadi, M. (2021). The impact of ownership structure on bank performance: Evidence from Jordan. International Journal of Financial Research, 12(5), 82-93.
Alzoubi, E. S. S. (2022). Institutional ownership and earnings management: Evidence from Jordan. Journal of Financial Reporting and Accounting, ahead-of-print.
Alzoubi, E. S. S. (2022). Ownership structure, board characteristics, and earnings management in Jordan. International Journal of Accounting & Information Management, 30(1), 85-104.
Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New York: Macmillan.
Boubakri, N., Cosset, J. C., & Saffar, W. (2012). The impact of political connections on firms' operating performance and financing decisions. Journal of Financial Research, 35(3), 397-423.
Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of Management, 30(6), 749-778.
Central Bank of Jordan. (2016). Corporate Governance Instructions for Banks. Central Bank of Jordan.
Claessens, S., Djankov, S., Fan, J. P., & Lang, L. H. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The Journal of Finance, 57(6), 2741-2771.
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20-47.
Demsetz, H., & Villalonga, B. (2001). Ownership structure and corporate performance. Journal of Corporate Finance, 7(3), 209-233.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147-160.
Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-64.
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65-91.
Douma, S., George, R., & Kabir, R. (2006). Foreign and domestic ownership, business groups, and firm performance: Evidence from a large emerging market. Strategic Management Journal, 27(7), 637-657.
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301-325.
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.
Haddad, A. E., AlShattarat, W. K., AbuGhazaleh, N. M., & Nobanee, H. (2011). The impact of ownership structure and family board domination on voluntary disclosure for Jordanian listed companies. Accounting & Management Information Systems, 10(2).
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193-206.
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383-396.
Hyarat, H. I., Husin, N. M., & Jos, R. A. G. (2023). The Impact of Audit Quality on Firm Performance: The Moderating Role of Ownership Concentration. International Journal of Professional Business Review, 8(4), 13.
Insurance Commission. (2015). Corporate Governance Regulations for Insurance Companies. Insurance Commission, Jordan.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305-360.
JSC. (2017). Corporate Governance Code for Shareholding Companies Listed on the Amman Stock Exchange. Jordan Securities Commission.
La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. The Journal of Finance, 54(2), 471-517.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000). Investor protection and corporate governance. Journal of Financial Economics, 58(1-2), 3-27.
McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2), 595-612.
Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.
Saidat, Z., Alrababa'a, A. R., & Seaman, C. (2022). Family-owned banks in Jordan: do they perform better? Journal of Family Business Management, 12(4), 637-652.
Shleifer, A., & Vishny, R. W. (1986). Large shareholders and corporate control. Journal of Political Economy, 94(3, Part 1), 461-488.
Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737-783.
Thomsen, S., & Pedersen, T. (2000). Ownership structure and economic performance in the largest European companies. Strategic Management Journal, 21(6), 689-705.
Zeitun, R. (2009). Ownership structure, corporate performance, and failure: Evidence from the UAE. Corporate Ownership and Control, 6(3), 62-85.
Zeitun, R. (2009). Ownership structure, corporate performance, and failure: Evidence from panel data of emerging market the case of Jordan. Corporate Ownership and Control, 6(4), 96-114.
Zeitun, R., & Tian, G. G. (2007). Does ownership affect a firm's performance and default risk in Jordan? Corporate Governance: The International Journal of Business in Society, 7(1), 66-82.
(Alrwabdah & Lok, 2024)
Alrwabdah, F., & Lok, C.-L. (2024). Corporate Governance, Ownership Structures and Firm Performance: Evidence from Jordan. International Journal of Academic Research in Business and Social Sciences, 14(8), 2360–2385.
Copyright: © 2024 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
