Ownership concentration, board characteristics and performance: evidence from Jordan

Purpose – The aim of this article is to examine the effects of ownership concentration and board characteristics on the performance of firms domiciled in Jordan. Design/methodology/approach – The article employs two-stage least square (2SLS) regressions on a sample of 103 firms listed on the Amman Stock Exchange for financial years 2002–2005. Findings – The empirical results suggest that ownership concentration, multiple directorships and board size are each positive and significant in determining firm performance. Although this result contradicts the findings of some developed country studies, they are consistent with recent emerging market studies. Implications – The findings of this article echo some of prior researchers’ contention that reforms in corporate governance principles in emerging markets should go beyond adopting the best practice in developed markets and take into account the country- and firm-specific characteristics. Originality/value – This article exploits a unique dataset of ownership and board characteristics in an emerging market, as well as provides additional evidence on the relation between corporate governance and firm performance. Results of this research provide useful information for policymakers and legislators to understand the environment for corporate control in developing countries.