Economics and Admin Sceince

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Browsing Economics and Admin Sceince by Author "Abudik, Abullateef"

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    IMPACT OF CORPORATE GOVERNANCE MECHANISMS ON CORPORATE FAILURE PREDICTION: EMPIRICAL EVIDENCE FROM PALESTINE EXCHANGE
    (جامعة النجاح الوطنية, 2022-02-17) Abudik, Abullateef
    The main objective of this study is to examine the impact of corporate governance mechanisms on corporate failure prediction of companies, the study employed the quantitative design where the secondary data were obtained from the annual reports of companies listed in the Palestine Exchange during the period 2010-2019. The sample of this study comprises of 35 companies. In this study, three types of variables were used: (1) dependent variables, (2) independent variables, and (3) control variables. Corporate Failure represents the dependent variable. The corporate governance variables are the independent variables. Namely, Board Size, Board Meetings' Frequency, CEO Duality, Board of Directors’’ Independency, Institutional Ownership, Quality of External Audit, Remuneration of Directors, and presence of an Audit Committee. Company-specific features such as company age, company size, and company leverage are included in the logistic regression model as control variables to avoid misspecification of the regression model. The main results of the study indicated that there is a significant positive relationship between (Board of Directors’’ Independency, and Institutional ownership) and corporate failure. There is a significant negative relationship between the quality of external audit and the corporate failure prediction, while there is no significant relationship between (Board Size, Board Meeting's Frequency, CEO Duality, Remuneration of directors, and Audit Committee Existence) and corporate failure prediction. The results show a significant negative relationship between the control variable (Company Size) and corporate failure prediction; however, there are no significant relationships between (Company Age, Company Leverage) and corporate failure prediction. The researcher provides many recommendations, the most important of which are: each company must appoint a lawyer to follow up on the new legislation related to the company's work. Public shareholding companies should develop a practical plan to fully adhere to the principles of corporate governance, successful and large shareholding limited partnership companies should seek to transform into public shareholding companies to be listed in the Palestine Exchange, Issuance of a new Companies Law, organizing training courses to educate companies on the principles of governance and the benefits of adhering to them, generalizing and mainstreaming the experience of successful companies, so that other companies can benefit from it, the necessity for companies to activate their Boards of Directors, due to the positive impact such has on improving the performance of companies listed in the Palestine Exchange, developing and protecting them from failure, the regulatory authorities should activate the control over companies' compliance with the principles of corporate governance, and violating non-compliant companies, preparing various detailed studies as a means to enhance adherence to the principles of governance, by focusing on each of the principles of governance and by using the companies as case studies, in order to create a successful model for adherence to the principles of governance.