The Effect Corporate Governance on the Financial Performance of Jordanian Corporations industrial Sector

Abstract

This research investigates empirically the impact of corporate governance dimensions ( Board size, Audit Committee Meetings, and Audit Committee Shareholdings) on the performance of Jordanian industrials companies. The study employs pooled data, and OLS estimation method to examine empirically the relationship between Jordanian industrials companies  performance and corporate governance dimensions for 63 industrials companies quoted on the ASE. The study reveals a positive relationship between corporate governance dimensions: the number of board size and Audit Committee Shareholdings and Jordanian industrials companies performance. Whereas,  the separation of the role of Audit Committee Meetings have a negative relationship with performance. In addition, the study reveals that industrials companies benefit from large size in offering services. This study is subject to some limitations. First, employing proxies for actual corporate governance mechanisms and industrials' companies performance outcomes may not accurately capture the actual mechanisms or outcomes experienced by industrials' companies in the  marketplace. Second, due to the fact that the implementation of industrials companies’ corporate governance has started in Jordan from 2009 the study is constrained to the period 2013-2014 financial data.