The impact of foreign ownership on corporate governance: evidence from an emerging market

  • Received October 13, 2018;
    Accepted May 14, 2019;
    Published May 22, 2019
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/imfi.16(2).2019.09
  • Article Info
    Volume 16 2019, Issue #2, pp. 101-115
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This research explores the influence of foreign ownership on non-financial public shareholding firms in the Amman Stock Exchange (ASE). The study involved an investigation into the connection between non-Jordanian ownership and the company growth opportunity, stock liquidity, leverage, dividend policy and business output. The results highlight that foreign ownership can provide improved corporate governance practices by playing a decisive role in increasing the growth opportunity and enhancing the firms’ market valuation, as measured by Tobin’s Q. Moreover, the findings indicate that companies with foreign board membership have better operating performance and higher firm value. The rewards were reaped by foreign investors based on their superior monitoring ability, which affects the decisions made and actions taken by management.

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    • Table 1. Descriptive statistics
    • Table 2. Frequencies of firms of the study according to foreign ownership percentage
    • Table 3. Correlation matrix
    • Table 4. Results based on ordinary least square (OLS) regression
    • Table 5. Results based on fixed effect regression