Author(s): Mohammed Ibrahim Sultan Obeidat, Mohammad Abdullah Almomani, Tareq Mohammad Almomani, Nadeen (Mohammed Adnan) (M.Y) Darkel.
The study objects for determining whether firm value is affected by the operational efficiency of performance, and to determine whether major shareholding moderates the effect relationship of operational efficiency on firm value. To achieve the objectives of the study, secondary data covering the period from 2011 to 2020, of 28 out of a total of 32 listed manufacturing firms at Amman Stock Exchange, is collected and used in the analysis and hypotheses testing. Five indicators of operational efficiency are taken into consideration, including inventory turnover, receivables turnover, total assets turnover, cash flows from operations, and working capital, whereas Tobin’s Q is used as an indicator for firm value. Major shareholding that encompasses those shareholders having 5 percent or more of the entire number of shares outstanding, is used as a moderator, and firm size, which is measured using the natural logarithms of total assets, is used as a control variable. Using the regression method for data analysis and hypotheses testing, the study shows that operational efficiency of performance has a significant impact on firm value, and major shareholding plays a significant moderating role on the effect relationship of operational efficiency on firm value. More investigation of the effects of operational efficiency on different aspects of performance, and of more determinants of firm value, is strongly recommended.