The Impact of Ownership Structure and Corporate Governance on
Capital Structure of Jordanian Industrial Companies
MAHA SHEHADEH
Department of Accounting,
Faculty of Business, Middle East University,
Amman, JORDAN
ESRAA ESAM ALHARASIS
Department of Accounting,
Faculty of Business, Mutah University,
Al-Karak Governorate, JORDAN
HOSSAM HADDAD
Department of Accounting,
Faculty of Business, Middle East University,
Amman, JORDAN
ELINA F. HASAN
Department of Accounting,
Faculty of Business, Middle East University,
Amman, JORDAN
Abstract: - This study investigates the impact of ownership structure and corporate governance (CG) on the
capital structure using 798 firm-year observations of listed companies in the Amman Stock Exchange (2005-
2018). The Ordinary Least Squares is utilized to examine the relationships between the dependent variable (i.e.,
leverage) and a set of independent variables, including ownership concentration factors (proxied by the
institutional and largest shareholder) and CG factors (proxied by board size, CEO/chairman duality, board
composition, a committee of nominations and remuneration, meetings number). Empirical The data reveal a
strong negative (positive) relationship between the largest shareholder (institutional shareholder) and capital
structure. Regarding the CG factors, the regression results show that board size, composition, and several
meetings are the only factors correlated significantly positively with capital structure. Our examination is
primarily motivated by the inconclusive and limited empirical evidence on the association between ownership
and governance factors and capital structure. It enriches the literature by providing an updated model on capital
structure factors from a non-Western setting. This study adds new evidence by capturing the effect of the
unique characteristics of developing countries and the institutional environment. Using data from one of the
Middle Eastern nations (Jordan), this study is the first to examine ownership and governance elements in
capital structure research over an extended period. The results of this investigation benefit regulatory
authorities in monitoring and regulating the corporates. This led to considering the factors affecting Jordanian
firms' capital structure. The evidence generated in our study supports the development of strict CG schema
rules by protecting the safety of stakeholders and policymakers.
Key-Words: - corporate governance, leverage, CEO duality, capital structure, ownership.
Received: July 6, 2021. Revised: December 22, 2021. Accepted: January 15, 2022. Published: January 16,
2022.
1 Introduction
We are examining the purpose of this research to
examine the effect of Corporate Governance (CG)
and ownership structure factors on the capital
structure of Jordanian Industrial Companies. CG has
been a critical concept since the global financial
crises and the collapse of major companies and
international banks. Financial statement fraud
resulted in the demand for better governance
protocols [7] and [46]. Therefore, CG is essential to
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
361
Volume 19, 2022
companies' shareholders and stakeholders [5]. It
protects stakeholders by defining the board of
directors functions and improving confidence and
trust in stakeholders [33]. CG and capital structure
are related through their association with agency
costs. Many factors go into how a company's capital
structure is set up. Still, one of the most important is
how much it costs to hire an agent. CG is structured
to reduce agency issues and enhance a company's
capability to achieve stability.
An essential part of a company's CG is ensuring
management is keen on adopting decisions that
protect shareholders' interests and improve the
firm's performance. CG includes several codes that
can be fulfilled using a subset of tasks (rules). One
of the essential codes is related to the Board of
Directors (i.e., duties and responsibilities,
Committees formed by the Board of Directors, and
several meetings). Noncompliance with such codes
might lead to the problem of asymmetric
information caused by agency conflict and could
significantly influence making well-informed
business decisions such as debt structure [2].
Hence, CG and ownership structure factors and
capital structure are related to their association with
agency costs. Agency cost is one of the most
significant factors affecting capital structure in
contemporary corporate finance literature. At the
same time, CG and ownership structure are all
factors that reduce agency issues to enhance the
capability of a company to achieve stability. A few
kinds of research have investigated the relationship
between CG and ownership structure on capital
structure, even in developed countries [23]. So, it is
vital to understand such a relationship to provide a
good investment climate for all parties.
Ownership concentration is a critical CG tool for
evaluating managers' discretion and improving the
reliability of financial information available to the
public [7]. According to some experts [24], CG
results in high-quality information since one of the
essential strategies to enhance CG operations is to
concentrate ownership. [6]’s experiments
demonstrated a statistically significant positive
correlation between government ownership and
earnings quality. In this regard, government owners
want lower profit margins to reduce the probability
of business resources being tunnelled to preserve
their political interests and evade scrutiny by
minority shareholders [51]. The actual well-known
agency conflict may be solved through such rules,
processes, and mechanisms. In line with this
argument, a relation is well founded theoretically
and empirically. On the one hand, CG and
ownership structure are linked, according to the
study; on the other hand, capital structure is
connected, according to research. The influence of
CG and ownership on capital structure in a
developing country like Jordan has never been
examined.
Traditional accounting regulatory systems are
becoming less likely to match the expectations and
demands of international stakeholders in an age of
globalization. Developing nations always attempt to
link their economy with the global one due to their
more closely aligned trading interests, economic
cooperation and political integration among
developing countries [36]. These factors, in turn,
lead to more transparent and harmonized financial
information being required and delivered [1]. These
changes are significant in developing countries more
than in developed countries [8], as the traditional
accounting regulations and practices restrict
countries' opportunities to attract foreign investors
[5]. In this respect, international stakeholders seek
harmonized and transparent accounting information
to serve their modern needs.
There is a high concentration of ownership among
companies in the Middle East and Jordan [13].
According to agency theory, Shareholders and
management have a built-in conflict of interest. This
conflict is due to owners appointing managers to
serve their interests and objectives of wealth
maximization. The ownership structure is deemed
one of the main factors that cause higher financial
risks for firms [45].
There has been a wealth of empirical research on the
effect of CG on a business's performance and the
impact of ownership structure on firm value.
However, the link between capital structure and CG
has received little attention. (Bodaghi and
Ahmadpour, 2010; Feng et al. 2020). A few papers
on the effects of CG on capital structure choices
made by enterprises in established or developing
markets have been referenced [50] and [23]. We are
unaware of any published effort indicating whether
ownership concentration and CG factors could
affect firms' capital structure, especially in
developing countries like Jordan. As a result, the
primary goal of this study is to analyze the influence
of ownership structure on financial performance
(i.e., most extensive ownership and institutional
ownership) and CG (i.e., Board Size, Board
Composition, CEO/Chair Duality, Number of
Meeting and Committee of Nomination and
Remuneration) on capital structure proxied by the
leverage ratio.
The Ordinary Least Squares regression (OLS) was
used to test the developed hypotheses using hand-
collected data from 57 (798 firm-year observation)
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
362
Volume 19, 2022
Jordanian-listed [30] 's models to suit the current
study's context characteristics and meet its
objectives and test its proposed hypotheses. The
OLS regression analysis confirms a significant
negative (positive) relationship between the largest
shareholder (institutional shareholder) and capital
structure. Regarding the CG factors, the regression
results show that board size, board composition and
meeting number are the only factors correlated
significantly positively with capital structure.
Again, our examination is primarily motivated by
the inconclusive and limited empirical evidence on
the association between ownership and governance
factors and capital structure. The study is an
opportunity to document crucial empirical evidence
from a country with varied economic features,
regulations and an environment considered
representative of Arab countries and the Middle
East (ME) [29]. This addition makes the study's
conclusions more practical and relevant to various
contexts. Thus, increasing its validity and
generalisability to those ME countries with similar
cultural and institutional characteristics. Jordan
clearly illustrates the significance of upgrading and
adopting superior CG schemas, with ever-increasing
interest from foreign investors and organizations
[2]. Therefore, the evidence generated in this study
contributes to compliance with government CG
requirements/or regulations. This examination,
moreover, is a trustworthy opportunity to explore to
what extent the ownership concentration proxies
would affect Jordanian firms' capital structure.
Because the ownership structure is often used to
create CG frameworks, the results of this analysis
are supposed to assist policymakers and regulatory
authorities operating in Jordan in improving
legislations and regulations that could improve CG
practices in Jordan. Such legislation might play a
critical role in safeguarding investors/shareholders
by imposing harsh penalties on firms that breach the
regulations [13].
2 Theoretical Foundation of the Study
The present investigation explores the association
between the factors of CG and ownership structure
on capital structure through integrating several
related theories, such as Agency Theory, Trade-off
Theory, Signalling Theory, and Pecking Order
Theory [8], [46], [26] and [23].
CG has become more prominent nowadays than
ever before. [35] indicates that good CG maximizes
the profitability and long-term value of the firm for
shareholders. [35]’s, view CG as a set of
mechanisms through which outside investors protect
themselves against expropriation by insiders. CG is
generally connected with agency problems, which
result from the separation of ownership from control
(managers), leading to conflict of interests within
the firm. It may be traced back to the separation of
ownership and corporate management. Conflicts of
interest between shareholders and managers give
rise to agency issues [28]. As a result of this conflict
of interest between company management and
owners, interest has grown to find laws and rules
that can govern the relationship between the two
parties. Therefore, the primary purpose of applying
CG is to ensure a framework that balances
shareholders' and managers' interests appropriately.
CG principles set by Organisation for Economic Co-
operation and Development (OCED) (2004) are now
considered an essential universal indicator for policy
decision-makers, investors, corporations and other
stakeholders. They have strengthened CG and
improved firms' performance and value. They are
related to shareholders' rights or stakeholders' in
general [18], the board's responsibilities [48], and
disclosure and transparency [16] and [17]. CG's
ownership structure is essential because it affects
managers' incentives and efficiency [32].
Pecking Order Theory suggests a hierarchical
pyramid in the various selection techniques to
obtain funds through different means. Naturally,
companies first utilize internal funds; then, they may
use debt, and when such a method is no longer
there, they use new equity finance. According to the
pecking order model, developed by [40], a strict
ordering or hierarchy of sources of finance is set and
fixed. This results from adverse selection issues,
which occur when the firm possesses more
information about firm value than fund providers.
These issues disappear when retained earnings are
employed as marginal funding sources and are more
extensive for equity than debt financing.
[40] contrast this with the static trade-off theory, an
explanation of corporate leverage that eventually
proved to be sound, based on the Pecking Order
model (POT) by [20], among others. The Model's
explanation is based on actual observations of firms
which do not tend to issue stocks (shares); instead,
they prefer to have large cash reserves in their
holdings. [40] the conclusion that excessive
financial asset holding is due to a conflict of
interests between management and old and new
shareholders. [20] tends to consider that companies
go to outside funding only when challenging
conditions force them, and in all cases, debt
precedes equity. [34] Another way to say this is that
the pecking order theory shows that a company's
profitability plays a role in its financing decisions.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
363
Volume 19, 2022
The study says that businesses that have not already
decided how much debt and equity they want prefer
to get money from inside their own company. One
notices that the pecking order framework tends to
mix with theories about asymmetric information and
the cost of having an agent.
Signalling theory indicates that external
stakeholders can quickly learn about firms'
activities. Any information managers possess
concerning a firm's prospects (which markets do not
have access to) might be made public by these
managers' choices of capital structure choice. The
need to obtain some indications through specific
pointers within the financing structure. The
reasoning for information asymmetry theory can be
interpreted as the firm's value will necessarily
increase when leverage increases. This, in turn,
indicates the size and stability of future investments.
Based on the signalling theory, rising debt reveals
poor indications for future earnings and cash flow,
with less internal financing available to finance
development [36]. [49] verified that information
asymmetry may indicate a favourable association
between debt and asset structure regarding a high
fixed asset ratio; the more the loan amount, the
greater the value of the assets [49].
Modigliani and Miller developed the Trade-off
Theory in 1958 by arguing that Any company's
market value is distinct from its capital structure.
Their reasoning was founded on the premise that a
firm's capital structure has no effect on its cash flow
[34]. When interpreting their logic, we find that
capital structure is supposed to remain the same
even if we change companies [39] altered their first
position that the financing decisions of firms do not
influence their value; this indicates that firms which
realize higher profits are liable to use more debt.
This results in the debt being substituted for equity
to take advantage of interest-induced tax shelters.
The trade-off theory describes how a corporation
determines its debt-to-equity ratio under the premise
that an ideal capital structure exists, which allows
the firm to work and run efficiently and make sure
that external cash flow claims are minimized. Firms
are encouraged to expand their debt values [38].
[49] contend that a trade-off between tax gains and
increased bankruptcy costs bolsters a firm's cost of
capital. Bankruptcy costs go simultaneously with
the increase in the firm's debt level [40]. The study's
findings imply that businesses should make
considerable efforts to achieve an optimum capital
structure that strives to enhance the firm's worth by
striking a balance between tax advantages and
bankruptcy expenses that are generally associated
with rising debt levels.
3 Institutional Background
Jordan sought to integrate itself into the global
economy and, to do that, joined the World Trade
Organization and signed a European partnership
agreement and the Free Trade Agreement with the
United States. It also sought trade liberalization,
removing tariff barriers, and abolishing government
support policy, calling on market forces to
determine prices and economic competitiveness [2].
The laws and regulations of Jordan required
sufficient commitment by local companies linked to
the rights of owners. The Companies Act of 1997
and its later amendments have organized the
essential matters related to the company's
management and the role of each of the directors',
shareholders' and stakeholders' Councils [29].
CG in Jordan represents a set of laws, including the
Banking Act of 2002, the regulations and
instructions issued by the capital market institutions,
securities issuance, registration and education on the
listing of Securities on the Stock Exchange [55]. CG
regulations have introduced into the Jordanian
financial market framework in 2005 as an attempt
toward better governance effectiveness for
companies to maintain shareholders' equity, activate
the principle of justice among them, guarantee full
disclosure and openness for all parties, and
emphasize the responsibility of the Board of
Directors and its role in protecting the company, its
shareholders and stakeholders. The Central Bank of
Jordan is also keen on the framework of its efforts to
strengthen CG practices in the Jordanian banking
system through developing the CG of banks in the
Jordan Guide for the year 2007, to provide a
standard for the best international practices in this
field, based on what was stipulated in the principles
of CG issued by the Organization for Economic Co-
operation and Development (OECD) [55]. The
number of companies that applied and fully
complied with CG regulations has increased since
2007 based on the government noncement published
in the Second Forum of CG and social corporate in
the Middle East and North Africa.
The Jordan Securities Commission (JSC) also
prepared a directory containing the rules for CG to
establish a framework for managing and interacting
with others and for defining and protecting one's
interests, duties and responsibilities to achieve the
company's goals and objectives. The JSC also seeks
to preserve the rights of individuals with related
interests through rules based on the Securities Law
and Companies Law, in addition to international
principles set by the organization for Economic Co-
operation and Development [54].
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
364
Volume 19, 2022
4 Literature Review
The findings of previous studies investigating the
effect of ownership structure and CG on capital
structure were mixed and inclusive. Knowledge in
this field is discussed in this analysis as follows:
developed and developing nations' evidence.
Regarding the developed countries' published effort,
[43] examine the link between the ownership
structure, capital structure, and agency costs of
cooperatives. For 160 cooperatives in New Zealand
companies during (2005-2011) using OLS
regression. According to the statistics, the number
of independent directors and board member
experience has increased, and size decreases agency
costs in cooperative and mutual organizations in
New Zealand.
Additionally, obtaining loans or cash from non-
bank members lowers agency costs and boosts
profitability in co-ops and mutuals. [21] examines
the influence of capital structure quality on CG
quality. 67 European soccer teams are included in
the sample. Of (2005-2009). The authors use panel
data approaches and discover a negative association
between leverage and board size; nevertheless, they
find a positive relationship between ownership
structure and force. [24] establish a significant
association between executive ownership and power
and confirm the considerable effect of CG on the
leverage ratio in several UK corporations. The
findings indicate that the CG structure of a firm
determines the nature of the relationship between
executive ownership and leverage.
Regarding the developing countries' evidence,
for Malaysian firms, [44] concluded that there is a
significant relationship between CG and capital
structure. [47] found that Chinese government-
controlled firms have less leverage than non
government-controlled firms. For firms owned by
the government, there is a robust negative
relationship between diversification and power and a
weak positive relationship between unrelated
diversification and leverage. [4] reached the same
conclusions based on data from Pakistan's non-
financial firms. [23]’s confirmed the significant
positive correlation between board size and
ownership structure with capital structure in China
Regarding ME and Jordanian markets, [10]
investigated the relationship between capital
structure and ownership structure for 86 Jordanian
non-financial firms from (1994-2003), using a mix
of OLS and panel regression analysis. Results show
that leverage and institutional ownership have a
significantly negative relationship and that there is
no significant relationship between dividend policy
and influence. However, there is an important
negative relationship between leverage and business
risk and profitability and a positive relationship
between leverage and asset tangibility, liquidity,
growth rate, and firm size [33]. Furthermore, [15],
using a sample from 50 financial firms operating at
Tehran Stock Exchange, they found that the size of
the board of directors is strongly inversely
connected to the debt-to-equity ratio, but not the
CEO/Chair duality and the participation of non-
executive members on the board have a substantial
impact. Finally, the Capital structure was
significantly influenced by business size and return
on assets [27] and [24]. [14] explore the effect of
ownership structure and CG on bank performance in
the Gulf Cooperation Council (GCC) region in 2008
for 27 banks from GCC countries for the period
(2008), excluding Kuwait, using the OLS regression
model for analysis. They reported that duality and
board size had an insignificant impact on
performance. They also confirmed a positive and
significant relationship between foreign ownership
and performance. However, concentrated ownership
was found to be related in a negative way to Return
on Assets (ROA).
Evidence-based on Jordan's data is undertaken
by a few scholars, such as [37] investigated CG and
dividends policy in industrial and financial
companies listed in ASE (2007-2009). They found
that dividend yields decrease in firms with strong
governance structures due to lower information
asymmetry and that firm cash flow is retained.
Further, [52] investigated the relationship between
CG and leverage for the Jordanian stock market
(2005-2011). They concluded that an institutional
member has a negative association with power.
They also found that a significant shareholder has a
positive relationship with leverage while a foreign
member has no impact. [29] investigates the effect
of the board of directors' structure on the
performance of Jordanian banks listed in ASE
during the period (2005-2018). Ordinary least
squares (OLS) analysis is used to examine the
relationship between the dependent variables: return
on assets and return on equity, as measurements of
profitability, and the independent variables, which
include two proxies of CG (board size and CEO
duality) and board members' ownership mix,
nationality, gender diversity, stock beta and family
relations [1]. Results show no significant
relationship between the board of directors
nationality, the board size, family members and
bank performance [13]. However, the results show
that significant relationships exist between CEO
duality, gender diversity, board ownership and bank
performance. Recently, Alabdullah et al. (2018)
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
365
Volume 19, 2022
confirmed the considerable effect of CG factors on
the capital structure using data from Jordanian non-
financial firms.
In Jordan, institutional investors are an essential
instrument for monitoring the economy. ' Because
they can oversee the managers and enhance the
quality of financial reporting, CG schemes benefit
from the presence of large institutional investors [6].
According to [37] and [1], When compared to other
segments of the market, such intuitions in Jordan are
well-structured, well-organized, and well-
developed. The CBJ, for example, enforces rigorous
restrictions and is closely monitored. Therefore,
financial institution owners in Jordan are more
likely to seek higher percentages of CG applications
because they have the incentive and authority to
ensure that companies' financial reporting is
accurate and penalize management who fail to do so
[41] and [6]. [12] confirmed the significant effect of
ownership structure factors on capital structure in
the context of Jordan
Although several studies have emphasized
ownership structure and CG in Jordan, this study is
distinct from previous studies in Jordan
investigating the impact of CG and ownership
factors on the capital structure over an extended
study period (2005-2018). The type of companies'
studies (industrial and service sectors instead of the
finance industry) and the investigation of three
additional independent variables (most extensive
ownership, number of meetings and committee of
nominations and remuneration), all unstudied
before.
The following hypotheses have been proposed
based on the theoretical premises outlined above:
H1: ownership structure factors have a
significant impact on capital structure.
H2: Corporate governance factors have a
significant impact on capital structure.
5 Research Data and Sample Selection
The researcher hand-collected the data for this study
from Jordanian listed businesses' annual reports on
the Amman Stock Exchange (ASE) website between
2005 and 2018. (ASE 2021). The current study
period is selected to align with the first and more
recent CG requirements timelines as requested by
the government of Jordan. The subsequent years'
data is unavailable or distributed because of the
Covid-19 impacts. Table (1) below shows that the
initial sample comprised 235 firms. The final
sample consisted of 57 firms. After excluding 73
firms with missing data, 105 firms belong to the
financial industry. The selection of 57 firms has
been employed to test the effect of each CG and
ownership structure variable on capital structure.
Table (1) categorizes the final accepted sample into
the two main sub-industries presented in Panel A
and B.
Table 1. Sample selection method
Total
companies
Pooled
Preliminary sample
235
3290
(-) Companies with missing data
(73)
(1022)
(-) Companies belong to the
finance industry
(105)
(1470)
Total sample
57
798
Table 2. Final distribution of the sample by industry
Industry &
Sub-industry
Firm-Year
observations
Number of
accepted firms
Per cent
Panel A: A service industry
Diversified
Financial Services
56.00
4.00
0.07
Panel B: Industrial industry
Chemical Industries
98.00
7.00
0.12
Mining and
Extraction
Industries
140.00
10.00
0.18
Tobacco and
Cigarettes
28.00
2.00
0.04
Paper and
Cardboard
Industries
56.00
4.00
0.07
Engineering and
Construction
98.00
7.00
0.12
Printing and
Packaging
14.00
1.00
0.02
Pharmaceutical and
Medical Industries
84.00
6.00
0.11
Textiles, Leathers
and Clothing
42.00
3.00
0.05
Food and
Beverages
126.00
9.00
0.16
Electrical Industries
56.00
4.00
0.07
Total
798.00
57.00
1.00
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
366
Volume 19, 2022
6 Research Design
This analysis extends the quantitative tradition and
builds on the research of CG and Ownership
structure models. It modifies [30], [6] and [41]
models by incorporating the effect of new proxies
representing ownership structure and the GC factors
into the capital structure model.
Previous studies have employed several
classifications for ownership structure. For example,
[32] differentiated between owners with inside
equity, outside equity, and debt. [19] classified
owners as foreign, privately held corporations, legal
persons in public law, private persons, insurance
companies, banks, pension funds, and mutual funds.
For his part, [22] classified owners as majority
owners, minority owners, foreign and domestic. [22]
also differentiated between ownership by
employees, management, state, and local investors.
Moreover, [35] classified ownership structure into
family-owned, state-owned, and controlled by
corporations [13]. For this study, the ownership
structure refers to institutional and largest
shareholders.
Based on prior studies, many CG proxies have been
utilized to strengthen CG and improve firms'
performance and value. They are related to
shareholders' rights or stakeholders in general [18]
board's responsibilities [48], and disclosure and
transparency [16]. Overall, for this study, the board
size, board composition, CEO/Chair duality,
nomination committee, remuneration and number of
the meeting are employed as CG codes.
The impact of CG and ownership structure on
capital structure for 57 Jordanian industrial
companies over the period (2005 – 2018) is
examined, and several control variables are
incorporated into the current study (including ROA
and LOG_TA). The relationship between capital
structure and the independent variables is tested
using OLS regression. The model selection (fixed,
random effect model or OLS) is based on the
Hausman test results. The adjusted R square is
(0.2263) for the Model. Tabular analysis confirmed
that the Hausman test has a ch2 value of (17.07) and
a p-value of (0.047), which indicates that this test is
significant and confirms the validity of the random
effect model. When determining whether random
effects or basic OLS regression is better suited for
the multivariate study, the Breusch–the Pagan
Lagrange Multiplier test (LM) has been performed...
Untabulated LM test p-value is insignificant and
greater than 5% (P = 0.017). Because of this, the
present study's multivariate analysis will benefit
from OLS regression.
It is worth noting here that the present study's
models were tested using Stata software. We
extended the previous studies' models [30] and [15]
into the following equations (all variables are
defined in Table 3 below):
Equation 1 (Model 1): LEV = α
๐
+
(β1*%Largest) + (β2*% INST) + (β3*
LOG_TA) + (β4* *%ROA) + Ɛ.
Equation 2 (Model 2): LEV = α
๐
+ (β1*%BZ)
+ (β2*%BC) + (β3* DUALITY) + (β4*%
NMeeting) + (β5* CNOM & REM) + (β6*
LOG_TA) + (β7* *%ROA) + Ɛ.
Equation 3 (Model 3): LEV = α
๐
+
(β1*%Largest) + (β2*% INST) + (β3*%BZ) +
(β4*%BC) + (β5* DUALITY) + (β6*%
NMeeting) + (β7* CNOM & REM) + (β8*
LOG_TA) + (β9* *%ROA) + Ɛ.
Table 3. Variables definition and measurements
Variable
Definition
LEV
The leverage ratio is the total debt
divided by the total assets.
Largest
The most significant ownership
percentage in the company.
INST
Institutional ownership equals the
sum of the percentage of ownership
of the institutional shareholders of
each company.
BZ
Board Size.
BC
Board Composition.
DUALITY
CEO/Chair Duality.
meeting
Number of Meeting
CNOM &
REM
Committee of Nomination and
Remuneration
ROA
Return on assets is the net income
by total assets
LOG_TA
The size of the firm is the Natural
Log of a firm's total assets
α
The constant.
β
Coefficients of independent
variables (explanatory variables).
Ɛ
Residual.
6.1 Variables Measurement
6.1.1 Dependent Variable: Capital Structure
(Leverage):
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
367
Volume 19, 2022
Capital structure is measured by using the debt to
equity ratio and the ratio of total debt to total assets
following [38] and [30].
LEVit =TDit
TAit
Where:
LEVit: leverage for the company I in year t.
TDit: total debt for the company I in the year t.
TAit: total assets for company I in year t.
6.1.2 Independent Variables
6.1.2.1 Board Size
The board of directors, the highest authority in the
company structure, is critical in strategic choices
such as financial mix. As a result, it is regarded as a
significant variable in researching the influence of
CG on capital structure. According to [15], board
size in the present research is the natural logarithm
of the number of board members.
6.1.2.2 Board Composition
The variable board composition is a dummy
variable coded as one if the individual is a member
for less than five companies, 0 otherwise as
agreement with CG codes.
6.1.2.3 CEO/Chair Duality
If a person holds both chief executive officer and
chairperson positions, it may cause serious agency
problems. The CEO/Chair duality is included as a
dummy variable coded if the CEO is chairman; 0
otherwise.
6.1.2.4 Committee Nomination and
Remuneration
Committee Nomination and Remuneration is a
dummy variable coded one if (CNOM & REM)
exists; 0 otherwise.
6.1.2.5 Number of Meetings
The number of meetings is a dummy variable coded
one if the number of meetings in the fiscal is 6; 0
otherwise.
6.1.2.6 Institutional Shareholders
The institutional shareholders variable in the current
study is the sum of the ownership percentage of
each company's institutional shareholders following
[6] and [41].
6.1.2.7 Largest Shareholder
The most significant Shareholder variable in the
current study is the percentage of the most
extraordinary shareholder's ownership in each
company following [6] and [41].
6.1.3 Control Variables
6.1.3.1 Firm Size (SIZE)
The firm size variable in the present study is a
natural log of total assets following [6] and [41] as
follows:
LOG_TAit= Ln (TAit)
Where:
LOG_TAit: size for the company I in year t.
TAit: total assets for the company I in year t.
Ln (TAit): natural log of total assets for the
company I in year t.
6.1.3.2 Profitability- Return on Assets (ROA)
ROA is adopted as an accounting measure of
profitability. It is measured as the ratio of net
income (after interest and taxes) to total assets [45]:
ROAit = NIit
TAit
Where:
ROAit: return on assets for the company I in
year t.
NIit: net income after interest and taxes for the
company I in year t.
TAit: total assets for the company I in year t.
7 Descriptive and Correlation
Statistics
Table (4) below presents the descriptive statistics of
the study variables. The analysis provides the
descriptive and statistical data for the variables used
in the study model collected manually from 57
Jordanian industrial firms (798 year-firm
observations) from 2005 through 2018. It shows the
mean, standard, maximum and minimum values.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
368
Volume 19, 2022
Regarding the dependent variable, the capital
structure, which is proxied by leverage ratio, the
variable has a mean value of (5.61), ranging from (0)
to (6.614), with a low standard deviation of (0.964).
These figures are similar to those reported by [6]
and [41]. Furthermore, the capital structure ratio is
also apparently close to the ratios presented by some
scholars found for the Pakistani market by [30] and
[15] for the Iranian market on Teheran Stock
Exchange. However, the present study's mean
leverage is somehow different from the amount that
[53] found for some Jordanian firms. The influence
among firms may be due to differences in risk levels
and profitability, which may lower external funds
and the different timelines of the studies, sectors
included in the analysis and sample size.
In terms of the independent variables starting with
ownership structure factors, the firm's most
extensive ownership has a mean value of (0.910)
and a standard deviation of (5.210). Its values range
from (0.056) to (0.50), which indicates a
shareholding of 50% or more by one contributor.
The value 0 shows that a particular variable in the
sample is not applicable for this part under the
company. The variable of institutional ownership
has a mean of (0.370), ranging from (0.0) to (0.98),
and a standard deviation of (0.288). This indicates
that the contribution by institutions is minimal
compared to that of individuals. This finding is
consistent with [30] and [15], who found close
percentages of institution ownership contributions
by institutions in the Pakistani and Tehran markets,
respectively.
Regarding the CG factors, the board size variable
has been calculated by the LOG of board size,
yielding a certain percentage. The mean value is
(0.88), ranging from (0.48) to (1.11), and the
standard deviation is (0.14). This represents a high
percentage of board membership compared to board
sizes in developed countries, but it shows similar
results to those documented in other developing
countries research, like Pakistan (Hasan and Butt,
2009) and Iran (Bodghani and Ahmadpour, 2010).
The rest CG factors BC, CEO/DU, CNOM & REM,
and Meeting have mean values of (0.882), (0.858),
(0.534), and (0.231), respectively, with low standard
deviation values.
As for the control variables, firm size reported a
mean value of (16.73), ranging from (13.22) to a
maximum of (20.92), and a standard deviation of
(1.40). The profitability variable's values show a
high variation since they range from (0.000) to
(6.539) with a mean of (5.591) and a low standard
deviation of (0.954). This demonstrates a high
variation in profitability for the Jordanian firms
included in the current study's sample during the
study period.
Table (5) below presents the Pearson correlation
matrix results for the dependent and independent
variables. The test for multicollinearity ensures no
correlation problem emerges between the
independent variables used in the same regression
models where the highest value of correlation
coefficients is (0. 283), which is found for the
variables (ROA) and (BZ). LEV variable is shown to
negatively correlate with institutional, number of
meetings and return on assets. The results for (BZ,
ROA) are consistent with findings by [30] and [16]
but are inconsistent with their findings regarding the
duality of CEO/chair. The present study's findings
positively correlate with CEO duality, firm size,
board composition, a committee of nominations and
remuneration, and large ownership. The results for
(BC, LARGE, SIZE) are consistent with findings by
[30], [16] and [13]. The mean of the VIF test of the
whole variables utilized in the regression models
does not indicate any potentially major
multicollinearity concern when each Model's mean
VIF is less than 2 [6].
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
369
Volume 19, 2022
Table 4. Descriptive statistics
Where: (LEV) is the leverage, (LOG_TA ) is the size of the company,
(ROA) is the return on assets, (most significant) 1 is the biggest
shareholder, (INST) is the institutional shareholders, and (BZ) is the board
size. Five dummy variables (BC, NM, CEO Duality, CNOMs, and REM)
were excluded from the Table.
Table 5. Correlation Matrix
Notes: This Table presents Spearman correlation matrix results between dependent and independent variables.
**, * Correlation is significant at the 0.01, 0.05 levels (2-tailed), respectively.
8 Regression Analysis
Table (6) outlines the regression results regarding
the impact of ownership structure and CG on capital
using the OLS regression. Based on the outcomes
presented in Table (6) in Model (1), first, the results
of ownership structure factors in Model (1), there is
a significant negative (positive) relationship
between the largest shareholder (institutional
shareholder) and capital structure. Usually,
ownership affects a substantial debt to equity ratio.
[30] mention that an increase of 1% in shareholding
reduces leverage by about 0.9% because the most
significant shareholders' interests encourage them to
reduce debt and equity options. However, the
present study's results seem to run counter to
findings by other researchers like [25], who contend
that the tendency to have lower debt to equity ratio
will increase in the absence of significant external
ownership, and this will lead to a higher risk of debt
for the managers. A significant positive correlation
was documented between institutional shareholding
and leverage. This outcome is similar to [4] using
data from Pakistan's non-financial firms. Moreover,
the analysis results are consistent with [12]
conclusion in the context of Jordan. More recently,
the findings are very close to [23] outcomes, which
confirmed the significant positive association
between ownership concentration and capital
structure in China. By contrast, [30] did not find
similar values for Pakistani firms on the Karachi
stock market due to the context characteristics and
differences in CG regulations applied in both
settings. They comment that institutional
shareholding typically has a positive correlation
with ownership. This results from efficient control
by shareholders, which may reduce cost and
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
370
Volume 19, 2022
managerial exploitation for personal interests.
Therefore, hypothesis 1 is accepted.
Second, the analysis results of the CG factors shown
in Model (2) confirm that the board size, board
composition, and meeting number are the only factors
correlated significantly positively with capital
structure. This translates into more giant boards
resulting in less leverage because more members on
the board allow for more expertise in firm
management and interests. Similarly, [30] reached
the same conclusion and found negative results for
Pakistani firms. The results also agree with the
findings by [3], who affirm that larger boards will
struggle for lower debt levels. According to the
latter theoretical foundations, such boards make
clear to the managerial staff that using more equity
capital is essential to improve the firm's
performance. Recently, [4] reached the same
conclusion based on data from Pakistan's non-
financial firms. The same outcome is also confirmed
by [5] in the context of Jordanian non-financial
firms. More recently, the findings are similar to
those reported by [23], which confirmed the
significant positive association between board size
and capital structure in China.
No statistical correlation was found between the
duality of CEO/chairman and leverage. This
partially agrees with [15] results, which saw an
insignificant relationship between duality and
influence. It is preferable not to have the same
person occupy both CEO and chairman of board
positions to avoid agency problems. High control by
the CEO may cause opportunistic managerial
manipulation [30]. Thus, a negative correlation
between duality and leverage is preferable. There is
an insignificant relationship between the
nominations committee and remuneration and
influence. Such a committee in the firms studied is
helpful for the companies since it exercises a
monitories and supervisory role, leading to more
controls on spending and remunerations. The overall
justification of these results is that CG is still in its
early stages in Jordan and lacks satisfactory/or full
compliance with CG regulations. Therefore,
hypothesis 1 is accepted regarding the board size,
composition, and meeting number.
Third and finally, the control variables analysis
results have the expected size and signs, which is
what previous research has shown [23]. Regression
findings of pooled regression of all CG and
ownership structure factors presented in Model (3)
are not substantially different from those reported in
Models (1 – 2).
Table 6. OLS regression results
DV = LEV
Variables
Model (1)
OLS
Coeff.
(Robust t)
Model (2)
OLS
Coeff.
(Robust t)
Model (3)
OLS
Coeff. (Robust
t)
Intercept
246.621
97.189
80.706
(2.11)**
(0.92)**
(0.68)**
LARGEST
-2.135
-2.582
(2.45)**
(2.84)***
INST
64.813
33.660
(2.08)**
(-1.040)
BZ
305.986
286.388
(4.58)***
(4.14)***
BC
61.270
61.562
(2.45)**
(2.47)**
DUALITY
-0.241
-0.161
(-0.010)
(-0.010)
CNOM & REM
-26.620
-23.902
(-1.290)
(-1.160)
NMeeting
-35.648
-42.033
(2.21)**
(2.55)**
SIZE
13.643
7.761
9.331
(-1.830)*
(-1.110)
(-1.190)
ROA
-0.241
-0.243
-0.241
(6.04)***
(6.16)***
(6.12)***
Robust
Yes
Yes
Yes
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
371
Volume 19, 2022
Industry and
Year Effects
Controlled
Controlled
Controlled
N
798
798
798
F - Statistics
(3.44)***
(4.68)***
(4.61)***
Adj. R2
10%
12%
12%
Mean VIF
1.98
1.97
1.99
Note: This Table provides the findings of OLS regression of the capital
structure (LEV) on the ownership structure and CG factors. Robust t –
year and industry fixed effects control statistics.
***, **, * Indicate statistical significance at the 0.01, 0.05, and 0.10 per
cent levels using a two-tailed test. All Variables are defined in Table (1).
9 Robustness and Additional Analysis
9.1. Excluding GFC year
It is necessary to do further research since the
study's period (2005–2018) coincides with the Great
Recession of 2008, which might significantly
impact the primary regression findings. Hypotheses
were re-evaluated after omitting 2008 from the
overall sample set of data (57 firm-year
observations). According to loosely defined
research, the regression findings are consistent with
our first analyses.
10 Conclusion
Finally, this study empirically explores the link
between CG and ownership structure, as well as
capital structure, for Jordanian listed industrial
enterprises from 2005 to 2018. The regression
findings demonstrate a substantial negative
(positive) link between the most significant
shareholder (institutional shareholder) and capital
structure in terms of ownership structure elements.
The only CG characteristics substantially positively
connected with the capital structure are board size,
board makeup, and meeting frequency. The
outcomes of this examination significantly
contribute to evaluating the firm's attitudes against
CG codes application in JordanThis will aid future
policy improvements by government authorities in
creating favourable financial reporting
circumstances and, as a result, ensuring the optimal
deployment of CG schemas. Therefore,
strengthening stakeholder protection and assisting
policymakers in developing comprehensive CG
rules. This contribution makes the findings more
viable and applicable to more comprehensive
settings, such as ME countries with similar cultural
and institutional characteristics which follow the
accurate accounting and CG practices framework. It
will be interesting to extend this examination to
other countries in the ME and a longer time frame to
capture the potential effect of economic volatility
during the devastating COVID-19 pandemic. Future
research could extend the current study to different
industries and sub-industries, like the finance
industry.
Acknowledgement:
The authors are grateful to the Middle East
University, Amman, Jordan, for the financial
support granted to cover the publication fee of this
article.
References:
[1] Abdullatif 2016, 'Auditing fair value
estimates in developing countries: The case
of Jordan', Asian Journal of Business and
Accounting, vol. 9, no. 2, pp. 101-40.
[2] Abdullatif, M. and Al‐Rahahleh, A.S., 2020.
Applying a new audit regulation: reporting
key audit matters in Jordan. International
Journal of Auditing, 24(2), pp.268-291.
[3] Abor, J. (2007). Corporate Governance and
Financing Decisions of Ghanaian Listed
Firms. Corporate Governance: International
Journal of Business in Society, 7, 83-92.
[4] Ahmad, H., Akhter, N., Siddiq, T. and Iqbal,
Z., 2018. Ownership Structure, Corporate
Governance and Capital Structure of Non-
Financial Firms of Pakistan. Information
Management and Business Review, 10(1),
pp.31-46.
[5] Alabdullah, T.T.Y., Laadjal, A., Ries, E. and
Al-Asadi, Y.A.A., 2018. Board features and
capital structure in emerging
markets. Journal of Advanced Management
Science, 6(2).
[6] Alhababsah, S 2019, 'Ownership structure
and audit quality: An empirical analysis
considering ownership types in Jordan',
Journal of International Accounting,
Auditing and Taxation, vol. 35, pp. 71-84.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
372
Volume 19, 2022
[7] Alharasis, E.E., (2021a). The impact of fair
value disclosure on audit fees of Jordanian
listed firms (Doctoral dissertation, Victoria
University).
[8] Alharasis, E.E., Clark, C. & Prokofieva, M.,
(2021b). External Audit Fees and Fair Value
Disclosures among Jordanian Listed
Companies: Does the Type of Corporate
Industry Matter? Asian Journal of Business
and Accounting, 14(2).
[9] Al-Mwalla, M. & Bataineh, O. 2013.
Corporate Governance and Dividend Policy
in Jordan. CG Conference, Yarmouk
University. 2013.
[10] Al-Najjar, B. & Taylor P. (2008), The
Relationship between Capital Structure and
Ownership Structure. Managerial Finance,
34 (12), 919 – 933
.
[11] Al-Najjar, B. (2010), Corporate Governance
and Institutional Ownership: Evidence from
Jordan. Corporate Governance, Vol. 10 NO.
2, p. 176-190.
[12] Al-Najjar, B., 2010. Corporate governance
and institutional ownership: evidence from
Jordan. Corporate Governance: The
international journal of business in society.
[13] Alzoubi, ESS 2016, 'Audit quality and
earnings management: evidence from
Jordan', Journal of Applied Accounting
Research, vol. 17. no. 2.
[14] Arouri, H., Hossain, M., and Muttakin, M.
2011. Ownership Structure, Corporate
Governance and Bank Performance:
Evidence from GCC Countries. Corporate
Ownership and Control Journal, 8 (4), 365-
372.
[15] Bodaghi, A. & Ahmadpour, A. (2010). The
Effect of Corporate Governance and
Ownership Structure on Capital Structure of
Iranian Listed Companies. In the 7th
International Conference on Enterprise
Systems, Accounting and Logistics, 28-29
June, Rhodes Island, Greece.
[16] Botosan, C. & Plumlee, M. 2002. A Re-
examination of Disclosure Level and the
Expected Cost of Equity Capital. Journal of
Accounting Research. 40 (1), 21-40.
[17] Bushee, B. & Leuz, C. 2005. Economic
Consequences of SEC Disclosure
Regulation: Evidence from the OTC Bulletin
Board. Journal of Accounting and
Economics, 39, 233-264.
[18] Caton, G, L. & Goh, J. 2008. Corporate
Governance, Shareholder Rights ,and
Shareholder Rights Plans: Poison, Placebo,
or Prescription? Journal of
Financial and
Quantitative Analysis, 43(2), 381-400.
[19] Charkham, J. P. (1995). Keeping Good
Company: A Study of Corporate Governance
in Five Countries.
[20] Chen, J.J. (2004). Determinants of Capital
Structure of Chinese-Listed Companies
.
Journal of Business Research, 57, 1341-
1351.
[21] Dimitropoulos, P. (2014). Capital Structure
and Corporate Governance of Soccer Clubs:
European Evidence. Management Research
Review, 37 (7), 658 – 678.
[22] Djakov, S. (1999). Ownership Structure and
Enterprise Restructuring in Six Newly
Independent States. - Comparative Economic
Studies. Association for Comparative
Economic Studies, 41(1), 75.
[23] Feng, Y., Hassan, A. and Elamer, A.A.,
2020. Corporate governance, ownership
structure and capital structure: evidence from
Chinese real estate listed
companies. International Journal of
Accounting & Information Management.
[24] Fraij Jihad, Haddad Hossam, and Nemer Abu
Romman, (2021). The Quality of Accounting
Information System, Firm Size, Sector Type
as a Case Study from Jordan. International
Business Management, 15: 30-38.
DOI: 10.36478/ibm.2021.30.38
[25] Friend, I. & Lang, L.H.P. (1988). An
Empirical Test of the Impact of Managerial
Self- interest on Corporate Capital Structure.
Journal of Finance, 47, 271-281.
[26] Ghazwi, M. F. (2021). The Effect of
Corporate Governance on Corruption in
Public Listed Companies In The Context Of
Jordan. Psychology and Education
Journal, 58(1), 555-566.
[27] Haddad, H., AlKhodari D., Al-Araj, R. E. E.
M., Aburumman, N., and Fraij, J.(2021).
Review of the Corporate Governance and Its
Effects on the Disruptive Technology
Environment. WSEAS TRANSACTIONS on
ENVIRONMENT and DEVELOPMENT,
17, 1005-1021
[28] Haddad, H. (2016). Internal Controls in
Jordanian Banks and Compliance Risk.
Research Journal of Finance and Accounting,
7, 17-31.
[29] Hamdan, L.M. (2015). The Impact of Board
Structure on the Bank's Performance: Case of
the Banking Industry of Jordan 2005-2013.
Unpublished MA Thesis, Yarmouk
University, Irbid, Jordan.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
373
Volume 19, 2022
[30] Hasan, A. & Butt, S. A. (2009). Impact of
Ownership Structure and Corporate
Governance on Capital Structure of Pakistani
Listed Companies. International Journal of
Business & Management, 4(2), 50-57.
[31] Jensen, M. & Meckling, W. (1976). The
Theory of the Firm: Managerial Behavior,
Agency Costs, and Ownership Structure.
Journal of Financial
Economics. 3(4), 305-
360.
[32] Jensen, M. (1986). Agency Costs of Free
Cash Flow, Corporate Finance, and
Takeovers. The American Economic
Review.76 (2), 323-329.
[33] Kalogiannidis, S., 2021. Business Trust and
Communication as Predictors of Business
Growth. WSEAS Transactions on Business
and Economics, 18, pp.1512-1522.
[34] Kyereboah, C.A. (2007). The Determinants
of Capital Structure of Microfinance
Institutions in Ghana.
[35] La Porta, R., Lopez-De-Silanes, F., &
Shleifer, A. (1999). Corporate Ownership
around the World. The Journal of Finance,
54(2), 471-517.
[36] Malinoshevska, K.I., Martyshyn, D.,
Perestyuk, I., Panchenko, S. and Omarov,
AZAD, 2021. Management of financial and
economic development of border regions of
Ukraine. WSEAS Transactions on Business
and Economics, 18, pp.595-605.
[37] Matar, M & Nour, A 2007, 'The compliance
of Jordanian shareholding companies with
the principles of corporate governance: An
analytical comparative study between the
banking and the industrial sectors', Jordan
Journal of Business Administration, vol. 3,
no. 1.
[38] Miller, M. (1988). The Modigliana-Miller
Propositions after Thirty Years. Journal of
Economic Perspectives, 2(4), 99-120.
[39] Modigliani, F. & Miller, M. (1958). The Cost
of Capital, Corporation Finance and the
Theory of Investment. American Economic
Review, 48, 261-297
.
[40] Myers, S. C. (2001). Capital Structure.
Journal of Economic Perspectives, 15 (2):
81-102.
[41] Nawaiseh, ME, Bader, A & Nawaiseh, HN
2019, 'Ownership Structure and Audit
Pricing: Conventional Versus Islamic Banks
in Jordan', Academy of Accounting and
Financial Studies Journal, vol. 23, no. 2, pp.
1-20.
[42] OECD. (2004). Principles of Corporate
Governance, available at http
:
/
/WWW.oecd.org data oecd/32/18/31557724.
[43] Reddy, K. & Locke, S. (2014), The
Relationship between Ownership Structure,
Capital Structure and Corporate Governance
Practices, International Journal of
Managerial Finance, Vol. 10 Iss 4 pp. 511 –
536.
[44] Saad, N. (2010); "Corporate Governance
Compliance and the Effects to Capital
Structure in Malaysia", International Journal
of Economics and Finance, Vol. 2, No.1,
February 2010.
[45] Sangchan, P, Habib, A, Jiang, H & Bhuiyan,
MBU 2020, 'Fair Value Exposure, Changes
in Fair Value and Audit Fees: Evidence from
the Australian Real Estate Industry',
Australian Accounting Review, vol. 30, no.
93.
[46] Shhadeh, M.K., (2015). The Impact of
Ownership Structure and Corporate
Governance on Capital Structure of
Jordanian Companies listed in Amman Stock
Exchange (Master dissertation, Yarmouk
University).
[47] Su, Larry D. (2010). Ownership Structure,
Corporate Diversification and Capital
Structure: Evidence from China's Publicly
Listed Firms. Management Decision, 48 (2),
314-339.
[48] Tuggle, C., Sirmon, D., Reutzel, C. and
Bierman, L. (2010). Commanding Board of
Directors' Attention: Investigating How
Organizational Performance and CEO
Duality Affect Board Members' Attention to
Monitoring. Strategic
Management Journal,
31 (9): 946-968.
[49] Voulgaris, F., Asteriou, D. &
Agiomirgianakis, G. (2004). Size and
Determinants of Capital Structure in the
Greek Manufacturing Sector. International
Review of
Applied Economics, 18(2), 247–
262.
[50] Wen, Y., Rwegasira, K., & Bilderbeek J.
(2002), Corporate Governance and Capital
Structure Decisions of the Chinese Listed
Firms. Corporate Governance: An
International Review, 10(2), 75-83.
[51] Weshah, S., Elessa, M., Shanti, A., Salameh,
R. and Al-Tahat, S., 2021. Earning
Management Practices within ERP
Environment: A Case Study of ERP's
Companies Listed in Amman Stock
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
374
Volume 19, 2022
Exchange. WSEAS Transactions on Business
and Economics, 18, pp.846-854.
[52] Yaseen, H. & Al-Amarneh, A. (2013).
Corporate Governance and Leverage:
Evidence from the Jordanian Stock Market.
Research Journal of Finance and Accounting,
4 (19), 29-35.
[53] Zurigat, Z. & Al-Mwalla M., (2011).
Dynamic or Constant Movement toward the
Target Capital Structure: Evidence from
Jordanian firms. Interdisciplinary Journal of
Contemporary Research in Business, 3 (8),
311-330.
[54] ASE Amman Stock Exchange (2021).
Available on:
https://www.ase.com.jo/en/audience/Issu
ers
[55] OECD (2021). Available on:
https://www.oecd.org/countries/jordan/
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
The authors are grateful to the Middle East
University, Amman, Jordan, for the financial
support granted to cover the publication fee of this
article.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
_US
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.32
Maha Shehadeh, Esraa Esam Alharasis,
Hossam Haddad, Elina F. Hasan
E-ISSN: 2224-2899
375
Volume 19, 2022
