Ownership structure and firm performance: Evidence from non-bank financial institutions in Jordan

Suhaib Mohammed Sulaiman Alkhazaleh ()

Asian Economic and Financial Review, 2024, vol. 14, issue 9, 660-682

Abstract: This study examines the relationship between ownership structure and firm performance using empirical data on non-bank financial institutions (NBFIs) in Jordan. The study employed a cross-sectional dependency test, the Levin–Lin–Chu panel data regression test, the Im–Pesaran test (CIPS), panel causality test, Pedroni regression analysis, generalized method of moments (GMM), and pooled mean formula. The sample consisted of 80 NBFIs listed on the Amman Stock Exchange (ASE). Four-panel unit root tests show that ownership concentration dynamics are robust at the first variance, and the Pedroni panel cointegration results demonstrate a long-run link between ownership concentration processes and corporate value. Similarly, research using GMM and pooled mean group (PMG) approaches reveals that ownership concentration procedures have a major impact on firm performance, as evaluated by Tobin’s Q. The study also reveals that government ownership boosts the profitability of NBFIs, contradicting previous research that suggests a strong inverse relationship between government ownership and NBFI efficiency. Conversely, the results of this study are not consistent with those of other studies which found a significant negative correlation between the efficiency of NBFIs and government ownership.

Keywords: Firm performance; Jordan; Non-bank financial institutions; Ownership; Pedroni cointegration test; Pooled mean group; System GMM. (search for similar items in EconPapers)
Date: 2024
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