Marwan Mansour

The purpose of this paper is to empirically investigate the impact of capital structure decisions on firm performance in Jordan (2010–2018), as well as the extent to which firm size matters in the capital structure-performance relationship. The dependent variable was market share. The main independent variables were the book value of total debt ratios, and firm-specific factors such as firm size, firm age, firm growth, and market-to-book value of equity served as control variables. This study used a quantitative research method using panel data analysis of 830 firm-year observations. Random effects model was employed to analyze the capital structure-performance nexus. To infer correctly, the main analysis was re-examined using the generalized method of moment estimator to overcome possible endogeneity concerns. After controlling for endogeneity and firm heterogeneity, this study finds that the book value of capital structure has a significantly positive relation to a firm’s market share. Hence, every one unit increase in the book value of total debt ratios will increase market share by 4.77%. The firm size, sales growth, and market-to-book value of equity had a significantly positive association with market share. Hence, every one unit increase in firm size, growth and market-to-book equity ratio will increase a firm’s market share by 8.84%, 2.06%, and 2.15%, respectively, but surprisingly, firm age did not meaningfully contribute to operating performance. Another important finding was that the strength of a positive relationship between the book value of total debt ratios and market share depends on the size of a firm and is mostly higher for larger-sized firms. Hence, every one unit increased in the book value of total debt ratios for large firms will increase market share by 10.58%.

The high pays received by executives has gained global attention. This study examines the impact of executive compensation on the performance of Jordanian banks, an area that has not been explored much. The study uses empirical methods for data collection and analysis. Dependent variables include Return on Equity (ROE) and Tobin’s Q performance, while total compensation incentives is the main independent variable. Control variables include bank size, bank age, leverage, and female executives. Through balanced panel data analysis comprising 196 bank-year observations, this quantitative research paper applies Ordinary Least Squares (OLS), fixed-effect, and Generalized Method of Moment (GMM) methods. These methods accurately establish the compensation-performance relationship in the banking sector from 2009 to 2022. The coefficient of determination (R2) for the ROE model: 51.63%, Tobin-Q model: 39.33%. These robust models support the main finding that executive compensation is significantly and positively correlated with operating and market-based performance indicators. Results validate the agency hypothesis, indicating that executives are rewarded for bank performance indicators. Consequently, a one-unit increase in executive compensation leads to a rise of 22.8 cents in ROE and 29.51 cents in Tobin-Q. Additionally, bank size, age, leverage, and female executives positively impact bank performance indicators. A modification of BSIZE, BAGE, LEV, and FEMALE by one-unit results in a proportional adjustment of 26.1 cents, 16.6 cents, 2.07 cents, and 48.6 cents, respectively, in ROE. Additionally, a one-unit alteration in BSIZE, BAGE, LEV, and FEMALE corresponds to variations of 77.6 cents, 56.42 cents, 34.39 cents, and 48.8 cents, in Tobin-Q, all in the same direction.

Board diversity is crucial for corporate governance and improves corporate outcomes by aligning management with stakeholders’ interests. Compared to advanced environments, Jordan’s decent sociocultural backdrop exhibits a higher level of gender bias. This study investigates the influence of board gender diversity (BGD) on Jordanian banking sector performance, an under-explored area. This quantitative paper employs Ordinary Least Squares (OLS), random, and fixed-effect approaches to analyze 182 bank-year observations for balanced longitudinal data analysis. These approaches correctly establish the BGD-Tobin’s Q nexus during 2010–2022. The coefficient of determination was 70.57%. The model confirms a positive correlation between BGD and market-based performance indicators. Findings support agency and resource dependency hypotheses, showing BGD’s role in decision-making. Hence, a one-unit increase in BGD causes a 37.2-cent increase in Tobin’s Q measure. Moreover, a one-unit change in board independence, board meetings, size, women’s representation in top management, and capital adequacy ratio, assuming all other factors remain constant, results in Tobin-Q changes of 2.57 cents, 32.8 cents, 5.78 cents, 51.2 cents, 30.55 cents, and 22.86 cents, respectively, and the same direction. The results show how BGD enhances bank performance and contributes to relevant theories. The results are vigorous in a variety of identification and estimation methodologies.