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Article
Publication date: 6 November 2023

Mohammad Tayeh, Rafe’ Mustafa and Adel Bino

This study investigated the impact of corporate ownership structure on agency costs in the insurance industry.

2128

Abstract

Purpose

This study investigated the impact of corporate ownership structure on agency costs in the insurance industry.

Design/methodology/approach

The study sample included 23 insurance companies listed on the Amman Stock Exchange (ASE) from 2010 to 2019. Panel regression was used to account for the firm- and time-specific unobservable variables and system-GMM estimation was used to address endogeneity concerns.

Findings

The results show that managerial ownership positively (negatively) affects selling, general and administrative (SG&A) expenses (assets turnover), implying that unmonitored managers engage in activities that serve their own interests rather than those of shareholders. The largest shareholder's ownership has no impact on agency costs, implying that the ownership of the largest shareholder is irrelevant. However, as the wedge between the percentage of capital owned by the largest shareholders and managers increases, SG&A expenses (efficiency ratio) decrease (increases), indicating that the existence of large non-management shareholders reduces agency costs. After accounting for the endogeneity problem, the impact of ownership structure on agency costs measured by asset turnover remains robust.

Originality/value

To the best of the authors' knowledge, this study is the first to provide unique evidence and useful insights into the determinants of agency costs from a frontier market in the Middle East and North Africa (MENA), with a focus on the insurance sector. Additionally, this study uses a new measure of separation between ownership and control by calculating the wedge between managers' and large shareholders' ownership.

Details

Journal of Economics, Finance and Administrative Science, vol. 28 no. 56
Type: Research Article
ISSN: 2077-1886

Keywords

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Article
Publication date: 4 December 2020

Adel Almasarwah, Mohammad Almaharmeh, Ahmed M. Al Omush and Adel Sarea

This study investigates the nature of the association between profit warnings and stock price informativeness in the context of Jordan as an emerging country.

440

Abstract

Purpose

This study investigates the nature of the association between profit warnings and stock price informativeness in the context of Jordan as an emerging country.

Design/methodology/approach

The authors used a large panel data set that related to stock price synchronicity and profit warnings percentages on the Amman Stock Exchange for the period spanning 2007–2018. Robust regression was used as a parametric test. This enabled us to obtain stronger results that fall in line with our prediction that a profit warning encourages firm investors to collect and process more firm-specific information than common market information.

Findings

Our findings show a significant positive effect of profit warnings on the amount of firm-specific information incorporated into stock price, which means that the greater the percentage of profit warnings the more likely that more firm-specific information will be incorporated in stock price synchronicity. In addition, corporate governance characteristics (moderating variables) significantly increase the level of the relationship between profit warnings and stock price synchronicity.

Practical implications

Our study results could be useful to investors, senior managers, and regulators in Jordanian firms, particularly in relation to decisions about enhancing the quality of financial statements. In addition, our results provide new evidence about the consequences of earnings announcements for information content and the informativeness of stock prices. Our methodology and evaluation of profit warnings may also demonstrate useful evidence for future researchers on profit warnings and stock price informativeness in developing economies, especially given that such evidence is scarce in developing economies.

Originality/value

This research is the first study of its kind on emerging markets, particularly in the Middle East. Moreover, entering the corporate governance variables as moderating variables to the robust regression was found to be more powerful than other regressions.

Details

Journal of Investment Compliance, vol. 21 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 28 October 2021

Adel Abdallah, Mohamed M. Fouad and Hesham N. Ahmed

The purpose of this paper is to introduce a novel intensity-modulated fiber optic sensor for real-time intrusion detection using a fiber-optic microbend sensor and an optical…

159

Abstract

Purpose

The purpose of this paper is to introduce a novel intensity-modulated fiber optic sensor for real-time intrusion detection using a fiber-optic microbend sensor and an optical time-domain reflectometer (OTDR).

Design/methodology/approach

The proposed system is tested using different scenarios using person/car as intruders. Experiments are conducted in the lab and in the field. In the beginning, the OTDR trace is obtained and recorded as a reference signal without intrusion events. The second step is to capture the OTDR trace with intrusion events in one or multiple sectors. This measured signal is then compared to the reference signal and processed by matrix laboratory to determine the intruded sector. Information of the intrusion is displayed on an interactive screen implemented by Visual basic. The deformer is designed and implemented using SOLIDWORKS three-dimensional computer aided design Software.

Findings

The system is tested for intrusions by performing two experiments. The first experiment is performed for both persons (>50 kg) in the lab and cars in an open field with a car moving at 60 km/h using two optical fiber sectors of lengths 200 and 500 m. For test purposes, the deformer length used in the experiment is 2 m. The used signal processing technique in the first experiment has some limitations and its accuracy is 70% after measuring and recording 100 observations. To overcome these limitations, a second experiment with another technique of signal processing is performed.

Research limitations/implications

The system can perfectly display consecutive intrusions of the sectors, but in case of simultaneous intrusions of different sectors, which is difficult to take place in real situations, there will be the ambiguity of the number of intruders and the intruded sector. This will be addressed in future work. Suitable and stable laser power is required to get a suitable level of backscattered power. Optimization of the deformer is required to enhance the sensitivity and reliability of the sensor.

Practical implications

The proposed work enables us to benefit from the ease of implementation and the reduced cost of the intensity-modulated fiber optic sensors because it overcomes the constraints that prevent using the intensity-modulated fiber optic sensors for intrusion detection.

Originality/value

The proposed system is the first time long-range intensity-modulated fiber optic sensor for intrusion detection.

Details

Sensor Review, vol. 42 no. 1
Type: Research Article
ISSN: 0260-2288

Keywords

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