The role of corporate governance on the market value of the firms: A case study of industrial and investment companies listed in the Palestine exchange

Öz

The purpose of this paper is to examine the cause-and-effect relationship between corporate governance and the market value of companies in both the industrial and the investment sectors listed in the Palestinian stock exchange market. The data was collected from the annual financial reports and the websites of the companies for the period from 2013 – 2019. The content analysis and the panel data analysis were used to investigate the cause and the effect relationship of corporate governance on the company's performance. The results indicated that there is a positive cause and effect relationship for gender diversity on the market value of industrial companies listed on the Palestinian stock exchange market. Meanwhile, corporate governance dimensions were all insignificant to the market value of investment companies listed in the Palestinian stock exchange market. Thus, corporate governance has no effect on the market value of investment companies.

Anahtar Kelimeler

• corporate governance
• industrial sector
• investment sector
• Palestine economy

Kaynakça

1. Aboagye‐Otchere, F., Bedi, I., & Kwakye, T. O. (2012). Corporate Governance and Disclosure Practices of Ghanaian Listed Companies. Journal of Accounting in Emerging Economies, 2(2), 140-141.
2. Abu Eid, R. (2021). Examining Influence of Corporate Governance on Listed Companies Performance: Evidence from the Palestine Stock Exchange, Arabian Journal of Business and Management Review, 12(1), 1-5.
3. Al-Ahdal, W. M., Alsamhi, M. H., Tabash, M. I., & Farhan, N. H. (2020) The Impact of Corporate Governance on Financial Performance of Indian and GCC Listed Firms: An Empirical Investigation, Research in International Business and Finance, 51, 101083.
4. Al-Bsoul, O. F. (2018), The Impact of Profitability Indicators on The Market Stock Price of the Industrial Companies Listed on the Amman Stock Exchange (in Arabic), Master Thesis, Irbid National University, 2.
5. Bajaher, M. (2021) Corporate Governance and Financial Performance: An Empirical Study on Cement Companies Listed in Saudi Stock Market, Jerash for Research and Studies Journal, 20(2), 697-711.
6. Bansal, N. & Sharma, A. K. (2016). Audit Committee, Corporate Governance and Firm Performance: Empirical Evidence from India. International Journal of Economics and Finance, 8 (3), 103-116. Bubbico, R., Giorgino, M., & Monda, B. (2012). The Impact of Corporate Governance on the Market Value of Financial Institutions: Empirical Evidences from Italy. Banks and Bank Systems, 7(2).
7. Colombo, M. G., Franzoni, C., & Rossi–Lamastra, C. (2015). Internal Social Capital and the Attraction of Early Contributions in Crowdfunding. Entrepreneurship Theory and Practice, 39(1), 75-100.
8. El-Sheikh Saleh, E. T. (2014). The Impact of Implementing Financial Performance Indicators on Market Value of Jordanian Industrial Corporations (in Arabic), Master Thesis, Amman Arab University, 2.

9. Falah, W. M. Y. (2017). The Effect of Corporate Governance on Financial Performance of Listed Companies in Palestine Exchange (PEX), International Research Journal of Finance and Economics, 162, 89-105.
10. Gunawan, A. (2019). The Role of Corporate Governance Mechanism on Voluntary Disclosure. Jurnal Akuntansi, 23(1),127-142. https://doi.org/10.1016/j.jfineco.2008.10.007.
11. Khan, A., & Abdul Subhan, Q. (2019). Impact of Board Diversity and Audit on Firm Performance. Cogent Business & Management, 6(1), 1-16.
12. Lafuente, E., & Vaillant, Y. (2019). Balance Rather Than Critical Mass or Tokenism: Gender Diversity, Leadership and Performance in Financial Firms. International Journal of Manpower, 40(5), 894-916.
13. Lutz, S., Hegazy, K., Mohamed, E. K. A., & Basuony, M. A. K. (2020). International Ownership and Firm Performance in Arab Economies, Corporate Ownership & Control, 17(4), 308-318.
14. Mansur, H. (2018). The Effect of Corporate Governance on the Financial Performance of Listed Companies in Amman Stock Exchange (Jordan), Journal of Advanced Management Science, 6(2), 97-102.
15. Memon, Z., Chen, Y., & Samo, A. (2019). Corporate Governance, Firm Age, and Leverage: Empirical Evidence from China, Research Journal of Finance and Accounting, 10(2), 19-31.
16. Musa, B., Jerry, M. S. & Abdulrasheed, A. (2020). Effect of Board of Directors Gender Diversity on Financial Performance of Deposit Money Banks in Nigeria, Global Journal of Applied, Management and Social Sciences (GOJAMSS), 18(9), 9-19.
17. Pasaribu, P. (2017). Female Directors and Firm Performance: Evidence from UK Listed Firms, Gadjah Mada International Journal of Business, 19(2), 145-166.
18. Price, R., Roman, F.J. & Rountree, B. (2011). The Impact of Governance Reform on Performance and Transparency. Journal of Financial Economics, 99(1), 76-96.
19. Samarah, W. (2017), The Role of Foreign Aid in Achieving Sustainability of the Different Industrial Sectors in Palestine, Journal of Al-Quds Open University for Administrative & Economic Research, 2(8), 8-20.
20. Samarah, W. (2018), The Effect of Governance on Economic Growth in Palestine, Journal of Al-Quds Open University for Administrative & Economic Research, 3(9), 11-23.
21. Surki, H. (2021). The Impact of Corporate Governance Mechanisms in the Market Value of Companies: Applied Study on the Industrial Companies Listed on Palestine Exchange, Journal of Economics and Business (Islamic university of Gaza).
22. Thomsen, S., & Conyon, M. (2012). Corporate Governance: Mechanisms and Systems. Berkshire: McGraw Hill.
23. Tourani-Rad, A. & Ingley, C. (ed.). (2010). Handbook on Emerging Issues in Corporate Governance, World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 7502, May.
24. Tripathy, P., Behera, P., & Mishra, B. R. (2021). Study of Linkages Between Productivity, Export, and Outward Foreign Direct Investment: An Empirical Perspective of Indian Manufacturing Industries, International Journal of Finance & Economics. DOI:10.1002/ijfe.2492.
25. Xie, J., Nozawa, W. & Managi, S. (2020), The Role of Women on Boards in Corporate Environmental Strategy and Financial Performance: A Global Outlook, Corporate Social Responsibility, and Environmental Management, 27(5), 1-16.