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The Relationship Between Corporate Governance And The Performance Of Palestinian Firms: An Empirical Study

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  • Naser Abdelkarim
  • Said Alawneh

Abstract

This paper investigates the relationship between performance and corporate governance in Palestine. Firm performance is measured by Tobin’s Q, whereas corporate governance is determined based on the level of ownership concentration. Prior research in developed economies provides evidence that ownership concentration has a significant impact on firm performance, while evidence in emerging economies is inconclusive. However, in Palestine there is no prior empirical research on this relationship. This paper reports the results of an empirical study of a sample of firms listed at Palestine Securities Exchange during the period (2003-2006). The sample of the study consists of (16) firms, which represent around 50% of all listed firms. The paper reports a series of regressions that account for different specifications of firm valuation and ownership concentration. The results indicate that ownership concentration has a good explanatory power of market value change as measured by Tobin's q for years 2003 and 2006 but not for years 2004 and 2005. This paper provides some evidence, although not decisive, that ownership concentration is negatively related to firm value. This evidence invites further research in this area before deciding on the need for ownership de- concentration in Palestinian firms.

Suggested Citation

  • Naser Abdelkarim & Said Alawneh, 2009. "The Relationship Between Corporate Governance And The Performance Of Palestinian Firms: An Empirical Study," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 3(2), pages 105-120.
    • Handle: RePEc:ibf:ijbfre:v:3:y:2009:i:2:p:105-120
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    Cited by:

    1. Naser Abdelkarim & Yasser A. Shahin & Bayan M. Arquawi, 2009. "Investor Perception of Information Disclosed in Financial Reports of Palestine Securities Exchange Listed Companies," Accounting & Taxation, The Institute for Business and Finance Research, vol. 1(1), pages 45-61.
    2. Helmi A. Boshnak, 2024. "Ownership concentration, managerial ownership, and firm performance in Saudi listed firms," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(3), pages 462-475, September.
    3. Tabinda Qureshi & Waqas Mahmood, 2018. "Role of Corporate Governance in Firm “Performance and Ownership Structure†: Evidence from Listed Food Companies in Pakistan," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 4(6), pages 188-196, 06-2018.
    4. Yaseen Al-Janadi, 2021. "Ownership Structure and Firm Performance in the Middle East: A Meta-Analysis," JRFM, MDPI, vol. 14(12), pages 1-23, December.

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    More about this item

    Keywords

    Corporate Governance; Ownership Concentration; Financial Performance; Tobin's Q; Market Value and Book Value;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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