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Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan

The present study analyzes the effect of corporate governance mechanisms on the performance of privatized companies in the Jordanian market. Internal and external corporate governance are mechanisms believed to lead to the success of the privatization program. Internal factors, including ownership s...

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Main Authors: Al-Smadi, Ahnaf Ali, Norman Mohd-Saleh,, Izani Ibrahim,
Format: Article
Language:English
Published: FEP 2013
Online Access:http://journalarticle.ukm.my/7020/1/vol4ch4.pdf
http://journalarticle.ukm.my/7020/
http://www.ukm.my/ajag/index.html
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spelling my-ukm.journal.70202016-12-14T06:42:52Z http://journalarticle.ukm.my/7020/ Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan Al-Smadi, Ahnaf Ali Norman Mohd-Saleh, Izani Ibrahim, The present study analyzes the effect of corporate governance mechanisms on the performance of privatized companies in the Jordanian market. Internal and external corporate governance are mechanisms believed to lead to the success of the privatization program. Internal factors, including ownership structure (ownership concentration and type, board members and size) and external factors (audit quality), seemingly affect performance. Different from extant research, the present study analyzes the unique Jordanian market, where close supervision of the privatization program by the royal family is common. An agency perspective, coupled with political intervention, serves as the background for the present study. Privatization methods (for example, strategic partnership versus direct sale) chosen by the said authority are believed to affect the performance of privatized companies. Two-stage least squares (2SLS) and multivariate econometric methodology are used to examine a pool of data from listed companies in the Amman Stock Exchange from 1992 until 2001. The present study finds that the government’s refusal to relinquish control has resulted in the lack of success of the privatization program in Jordan. In contrast, factors demonstrating positive effects on the performance of privatized companies include private ownership concentration; foreign non-Arab ownership; small board size; and audit quality. The strategic partner chosen by the royal family and reduced government intervention positively affects the performance of companies. FEP 2013 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/7020/1/vol4ch4.pdf Al-Smadi, Ahnaf Ali and Norman Mohd-Saleh, and Izani Ibrahim, (2013) Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan. Asian Journal of Accounting and Governance, 4 . pp. 31-50. ISSN 2180-3838 http://www.ukm.my/ajag/index.html
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description The present study analyzes the effect of corporate governance mechanisms on the performance of privatized companies in the Jordanian market. Internal and external corporate governance are mechanisms believed to lead to the success of the privatization program. Internal factors, including ownership structure (ownership concentration and type, board members and size) and external factors (audit quality), seemingly affect performance. Different from extant research, the present study analyzes the unique Jordanian market, where close supervision of the privatization program by the royal family is common. An agency perspective, coupled with political intervention, serves as the background for the present study. Privatization methods (for example, strategic partnership versus direct sale) chosen by the said authority are believed to affect the performance of privatized companies. Two-stage least squares (2SLS) and multivariate econometric methodology are used to examine a pool of data from listed companies in the Amman Stock Exchange from 1992 until 2001. The present study finds that the government’s refusal to relinquish control has resulted in the lack of success of the privatization program in Jordan. In contrast, factors demonstrating positive effects on the performance of privatized companies include private ownership concentration; foreign non-Arab ownership; small board size; and audit quality. The strategic partner chosen by the royal family and reduced government intervention positively affects the performance of companies.
format Article
author Al-Smadi, Ahnaf Ali
Norman Mohd-Saleh,
Izani Ibrahim,
spellingShingle Al-Smadi, Ahnaf Ali
Norman Mohd-Saleh,
Izani Ibrahim,
Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
author_facet Al-Smadi, Ahnaf Ali
Norman Mohd-Saleh,
Izani Ibrahim,
author_sort Al-Smadi, Ahnaf Ali
title Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
title_short Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
title_full Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
title_fullStr Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
title_full_unstemmed Corporate governance mechanisms, privatization method and the performance of privatized companies in Jordan
title_sort corporate governance mechanisms, privatization method and the performance of privatized companies in jordan
publisher FEP
publishDate 2013
url http://journalarticle.ukm.my/7020/1/vol4ch4.pdf
http://journalarticle.ukm.my/7020/
http://www.ukm.my/ajag/index.html
_version_ 1643736975335751680
score 13.223943

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