Does board structure matter firm’s value? The Jordanian evidence

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This study aims to examine the impact of board structure on firms’ value in Jordan. Panel regression estimates were used to analyze the data collected from forty-four non-financial firms that listed on the Amman Stock Exchange for the period 2010–2021. Random effects model was applied using a dependent variable (Tobin’s Q), four independent variables (board size, independent directors, female directors, and CEO duality), and four control variables (firm size, age, leverage, and liquidity). The result provides ample evidence that CEO duality exerts a direct positive effect on firm value in Jordan. However, none of the independent variables used has a significant impact on firm value, conflicting with agency and resources dependence theories. Firms value is significantly influenced only by two control variables, i.e., a positive impact of firm size and leverage at the 5% significance level. The results indicate the imperfection of corporate governance compliance by Jordanian listed firms in the area of ensuring maximum firm value. These results could be helpful to the policymakers in Jordanian listed firms to enhance their leadership qualities and satisfy CEO desires to avoid agency conflict.

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    • Table 1. Variables description
    • Table 2. Descriptive statistics
    • Table 3. Correlation matrix and co-linearity test
    • Table 4. Goodness of fit model
    • Table 5. Summary of panel data estimates
    • Conceptualization
      Mohammed Abusharbeh, Husni Samara
    • Data curation
      Mohammed Abusharbeh, Husni Samara, Noor Aldeen Al-Alawnh
    • Formal Analysis
      Mohammed Abusharbeh, Husni Samara
    • Funding acquisition
      Mohammed Abusharbeh, Noor Aldeen Al-Alawnh
    • Investigation
      Mohammed Abusharbeh
    • Methodology
      Mohammed Abusharbeh
    • Project administration
      Mohammed Abusharbeh, Husni Samara, Noor Aldeen Al-Alawnh
    • Resources
      Mohammed Abusharbeh, Husni Samara
    • Software
      Mohammed Abusharbeh
    • Supervision
      Mohammed Abusharbeh
    • Validation
      Mohammed Abusharbeh, Husni Samara
    • Visualization
      Mohammed Abusharbeh
    • Writing – original draft
      Mohammed Abusharbeh
    • Writing – review & editing
      Mohammed Abusharbeh, Husni Samara, Noor Aldeen Al-Alawnh