The Effect of Corporate Governance on the Financial Performance of Jordanian Corporations Insurance Sector

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Saed Ismail Abu Salim Takiah Binti Mohd Iskandar

Abstract

This paper investigates empirically the impact of corporate governance dimensions (Board Composition, Chief Executive Officer (CEO) Status, and Foreign Ownership) on the performance of Jordanian insurances companies. The study employs pooled data, and OLS estimation method to examine empirically the relationship between Jordanian insurances companies performance and corporate governance dimensions for 27 insurances companies quoted on the ASE. The study reveals a positive relationship between corporate governance dimensions the number of outside board members and foreign ownership and Jordanian insurances companies’ performance. Whereas, the separation of the role of CEO and chair have a negative relationship with performance. In addition, the study reveals that insurances companies benefit from large size in offering services. This study is subject to some limitations. First, employing proxies for actual corporate governance mechanisms and insurances' companies performance outcomes may not accurately capture the actual mechanisms or outcomes experienced by insurances' companies in the marketplace. Second, because the implementation of insurances companies’ corporate governance has started in Jordan from 2010 the study is constrained to the period 2010-2012 financial data.

Article Details

How to Cite
ABU SALIM, Saed Ismail; ISKANDAR, Takiah Binti Mohd. The Effect of Corporate Governance on the Financial Performance of Jordanian Corporations Insurance Sector. International Sciences of Management Journal, [S.l.], v. 2, n. 2, p. 15, july 2017. Available at: <http://ojs.mediu.edu.my/index.php/ISMJ/article/view/730>. Date accessed: 24 sep. 2017.
Section
Financial Economics