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Analyzing the Impact of Quality of Public Governance on the Market Value of Companies Listed on the Amman Stock Exchange

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  • Amjad S. Qwader

    (Department of Business Economics, Business Faculty, Tafila Technical University, Jordan)

Abstract

This study aimed to examine the impact of public governance quality on the market value of companies listed on the Amman Stock Exchange from 2002 to 2021. The study utilized the Autoregressive Distributed Lag (ARDL) model to analyze slow-moving distributed time series. The findings indicated a significant and positive correlation between various indicators of quality of public governance, such as voting and accountability, political stability and absence of violence, and organizational quality, with the market value of the listed companies. These results align with economic theory assumptions. However, in terms of Monetary freedom, another important indicator of the quality of public governance, the study found no statistically significant relationship with the market value of the listed companies at a significant level. This observation may be attributed to the government's limited capacity to manage the country's public financial resources efficiently and effectively, particularly regarding transparent and responsible administration of taxation, debt, and government expenditure.

Suggested Citation

  • Amjad S. Qwader, 2024. "Analyzing the Impact of Quality of Public Governance on the Market Value of Companies Listed on the Amman Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 14(1), pages 28-38, January.
    • Handle: RePEc:eco:journ1:2024-01-3
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    References listed on IDEAS

    as
    1. Mariem Brahim & Houssem Rachdi, 2014. "Foreign Direct Investment, Institutions and Economic Growth: Evidence from the MENA Region," Journal of Reviews on Global Economics, Lifescience Global, vol. 3, pages 328-339.
    2. Meghana Ayyagari & Thorsten Beck & Asli Demirguc-Kunt, 2007. "Small and Medium Enterprises Across the Globe," Small Business Economics, Springer, vol. 29(4), pages 415-434, December.
    3. Amjad S. Qwader, 2024. "Analyzing the Impact of Quality of Public Governance on the Market Value of Companies Listed on the Amman Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 14(1), pages 28-38, January.
    4. Zulfiqar Ali Imran & Abdullah Ejaz & Cristi Spulbar & Ramona Birau & Periyapatna Sathyanarayana Rao Nethravathi, 2020. "Measuring the impact of governance quality on stock market performance in developed countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 3406-3426, January.
    5. Syed Ali Raza & Nida Shah & Imtiaz Arif, 2021. "Relationship Between FDI and Economic Growth in the Presence of Good Governance System: Evidence from OECD Countries," Global Business Review, International Management Institute, vol. 22(6), pages 1471-1489, December.
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    Cited by:

    1. Amjad S. Qwader, 2024. "Analyzing the Impact of Quality of Public Governance on the Market Value of Companies Listed on the Amman Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 14(1), pages 28-38, January.

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    More about this item

    Keywords

    Quality of Public Governance; Stock Exchange; Market Value of the Stock Exchange; ARDL;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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