Open AccessExploring the Constructed Corporate Governance Index’s Effect on the Firm Performance and Firm Value: An Empirical Study on Service and Industrial Companies Listed in Amman Stock Exchange
Author(s) -
Sliman S. Alsoboa
Publication year - 2016
Publication title -
european scientific journal
Language(s) - English
Resource type - Journals
eISSN - 1857-7881
pISSN - 1857-7431
DOI - 10.19044/esj.2016.v12n31p330
Subject(s) - corporate governance , stock exchange , business , accounting , index (typography) , enterprise value , value (mathematics) , service (business) , empirical research , tertiary sector of the economy , finance , marketing , statistics , mathematics , world wide web , computer science
The purpose of this study is to investigate corporate governance’s quality for Shareholding Companies Listed on the Amman Stock Exchange; to see how corporate governance index (CGI) and firm performance and firm value are associated; and last but not the least is to check how CGI affects firm performance and firm value. A comprehensive CGI containing 112 points was constructed and analyzed for years 2010 and 2015. It reported that the Jordanian industrial and service companies have a good CGI during these two years. Pearson correlation has showed positive but weak relationships between CGI and all variables in the two years. Multiple regression analysis was performed to evaluate corporate governance index effects on the performance and the value of firm. The results did not support the hypotheses that CGI significantly affects these two variables. To reach to better corporate governance in Jordanian industrial and service companies, the Jordanian authorities might need to modify the inconsistence between laws and corporate governance rules.