Browsing by Author "Saidat, Zaid"

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    Do Multiple Directorships Stimulate or Inhibit Firm Value? Evidence from an Emerging Economy
    (Emerald, 2022-07-04) Al-Haddad, Lara; Gerged, Ali Meftah; Saidat, Zaid; Al‑Qudah, Anas Ali; Aziz, Tariq
    Purpose: This study examines the potential influence of multiple directorships on the firm value of listed firms in Jordan. Design/methodology/approach: Using a sample of 1067 firm-year observations of Jordanian listed companies from 2010 to 2020, this study applies a pooled ordinary least squares (OLS) regression model to examine the above-stated relationship. This technique was supported by conducting a Generalized Method of Moments (GMM) estimation to address the possible occurrence of endogeneity concerns. Findings: Our results show a significant negative relationship between multiple directorships and firm performance, supporting, thereby, the “Busyness Hypothesis”, which suggests that directors with multiple directorships are expected to be over-committed, too busy, and less vigilant. Thus, their ability to effectively monitor the company management on behalf of the shareholders is quite limited. Originality/value: To the best of our knowledge, this is the first study in Jordan, and one of the very rare in the Middle Eastern and North African (MENA) region, to examine the relationship between multiple directorships and firm performance. This study provides important policy and practitioner implications in the field of corporate governance by highlighting the necessity of imposing stricter limits on the number of directorships allowed for board directors. Crucially, our empirical evidence implies that limited directorships ensure that directors are able to fulfil their board responsibilities appropriately, which is significantly associated with the firm value.
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    Managing earnings using classification shifting: Novel evidence from Jordan
    (Allied Academies, 2019-05-09) Al-Haddad, Lara; Gerged, Ali; Saidat, Zaid
    In response to McVay calls for more research to provide additional cross-sectional tests of classification shifting, the current paper examines whether Jordanian public companies engage in earnings management through classification shifting. Using a sample consisting of 112 public firms from Jordan during the 2010-2014 period, this study applies McVay (2006) Model to investigate the relationship between the non-recurring items (NREC) and the variation in unexpected core earnings (UCE). This analysis was supplemented with employing Fan et al., (2010) Model as a robustness check. Our empirical results reveal that managers in Jordan misclassify their recurring expenses to inflate their core earnings. More precisely, we find that non-recurring items (NREC) are significantly and positively associated with the variation in unexpected core earnings (UCE); thus, classification shifting is a common practice among Jordanian firms. Additionally, we find out stronger evidence on classification shifting when our sample was restricted to those firms with a more significant opportunity to misclassify recurring items (firms with positive NREC). This study contributes to the body of accounting literature by providing the first empirical evidence in the Middle East region overall on the use of classification shifting by Jordanian firms. We are also the first to apply McVay (2006) and Fan et al., (2010) models in the Middle East region. Our findings have important policy implications for standard setters, regulators, auditors and investors in their attempts to constrain earnings management practices and improve the financial reporting quality in Jordan.