A review of the influence of capital structure on the relationship between corporate governance and firm performance Online publication date: Fri, 14-Apr-2023
by Marwan Mansour; Hafiza Aishah Hashim; Faozi A. Almaqtari; Waleed M. Al-ahdal
International Journal of Procurement Management (IJPM), Vol. 17, No. 1, 2023
Abstract: This paper focuses on the relationship between corporate governance and firm performance in the case of Jordan as a developing country. Despite the evolution of the national economy, the government's efforts to attract foreign and domestic investment in order to merge at the global economy, and the stimulation of firms to perform better, the performance of firms in the non-financial sector is still weak. This can be attributed to a lack of clarity regarding the inter-relationships between corporate governance mechanisms and firm-specific characteristics such as capital structure. Therefore, this study presents a comprehensive review of the literature to highlight a theoretical approach that could contribute to clarifying the relationship between capital structure, corporate governance, and firm performance. In addition, it also proposes that a more accurate design be used for practical analysis that takes into account the moderation role of optimal capital structure and the potential presence of a complementary effect between optimal capital structure, corporate governance, and firm performance.
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