Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Abstract

The Extent of the Impact of Corporate Governance on the Effectiveness of Companies in the Jordanian Service Sector

Author(s): Osama Mohammad Khaleel Ballout

This study aims to investigate the commitment of public shareholding companies in the service sector to apply Corporate Governance (CG) principles. It aims also to clarify the relationship between the practice of CG in the service sector and effectiveness, and the relationship between the practice of CG and the value of these companies. The study sample consists of all service companies listed on the Amman Stock Exchange (2016-2018) which were (54) service companies that meet conditions. Multiple regression analysis was used to test the effect of independent variables (ownership concentration, and the independence of the Board of Managers) on dependent variables (market value to book value, market value to net income, and turnover of assets), The researcher also used the test of the presence of the phenomenon of multiple linear correlation Collinearity by testing the significance of the correlation coefficient between variables, The researcher used Independent-Sample and One-Sample t-test to measure the differences between the means. In addition to the use of the variable control that can have an impact on effectiveness (size of the company). The study results show a positive and statistically significant correlation of ownership concentration on effectiveness measures. It also shows a statistically significant commitment to the implementation of CG principles in companies above average in terms of concentration of ownership and the independence of the board of directors. The means reached 0.633 and 0.530 respectively.