vol 16 no 2,2016

The Impact of Corporate Governance Principles on the Stock Market Liquidity: An Emipirical Study on Financial Jordanian Public Corporation

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The Impact of Corporate Governance Principles on the Stock Market Liquidity: An Emipirical Study on Financial Jordanian Public Corporation

Suhayeb Ayedh Alkahtani

Department of Accounting

The School of Business

The University of Jordan-Jordan

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Prof. Abdel Naser Nour

Department of Accounting

Faculty of Economics & Administrative Sciences

Zarqa University- Jordan

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Omar Shaher Arabiat

Department of Accounting

The School of Business

The University of Jordan-Jordan

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Abstract:

This study aimed to identify the impact of corporate governance principles on the liquidity of the stock market in the financial companies listed on Amman Stock Exchange (ASE) for the period from 2009 to 2013. Corporate governance principles are represented by board size, board composition, CEO duality and black holders.

To achieve the objective of the study, descriptive statistics, correlation analysis and multiple regression analysis were used. The study sample includes (67) financial companies. The study results showed that most of the corporate governance mechanisms contribute to the reduction of the liquidity cost for the financial Jordanian public corporation.Based on the results of the study, several recommendations have been proposed the most important is the need to study the optimum number of the members of the board of directors in line with the company's strategy and practice associated with the element of liquidity and examine the ownership percentage for block holders and its impact on liquidity.

Key words: Corporate governance, Liquidity, liquidity cost, corporate governance principles, Jordanian financial companies.

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