Abstract
Drawing upon prior empirical research on the potential endogeneity of both ownership structure and firm performance in developed markets, this study examines the reverse causations that can exist between corporate performance and ownership structure in Tunisian listed companies. The study was extended to include board characteristics as a principal internal control mechanism for monitoring managers and an assessment of its potential effects on firm performance and ownership structure. Our findings proved the existence of endogeneity and a two-way causality between ownership variables and Market to book performance. However, our findings also revealed that corporate governance in Tunisian firms needed to be more strengthened based on board characteristics.
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