The Impact of Ownership Structure on the Performance of Jordanian Industrial Companies

Abstract

Equity structure is considered one of the most important factors that affect company performance. This has been proved by almost all empirical studies that examined this subject. This study examined the expected impacts of ownership structure on the performance of publicly-held companies in the Jordanian industrial sector, through two multiple regression models. The first includes a sample of 45 publicly held companies with no separation between family and non-family companies; and the second one contains a sample of 22 industrial family companies only. Two performance indicators were used: ROA and Tobin Q as a dependent variable through a panel regression. The study found that the structure of ownership, which is characterized by family control, does not affect performance differently from companies free from family control. It was proved also that the ownership of insiders as defined by this study, major shareholders, and the contribution of government in managing industrial companies all have a significant impact on the performance of the Jordanian industrial companies measured using Tobin Q. the study also found that if the general director of the company is from the same family controlling the company this will affect the performance of the company negatively, this may refer to the need for further modernization, development and activation of current corporate governance rules.