The moderating role of ownership structure between ethical business conduct, compliance and legal, transparency and disclosure, board of directors on financial performance

Abstract

This study examines how corporate governance dimensions relate to financial performance in Jordanian firms and whether ownership structure moderates these relationships. Quantitative analysis was conducted using secondary data on 69 companies listed on the Amman Stock Exchange from 2017-2022. Multivariate regression tested effects of board, transparency, ethics, and compliance indices on performance measured by Tobin's Q, ROA, and ROE. Moderated regression analyzed the contingency role of ownership concentration. Board size, independence, transparency, ethical conduct and legal compliance had significant positive impacts on valuations and profitability, supporting agency and stakeholder perspectives. Ownership concentration strengthened board monitoring but dampened transparency effects. The findings highlight the importance of governance practices like board oversight, disclosure and ethics for improving Jordanian firms' performance. Ownership contingencies suggest adapting governance mechanisms to concentrated structures. This study provides rare empirical evidence on the under-researched Jordanian context. Examining interactive effects of ownership brings new insights regarding concentrated emerging markets.