Do Audit Committees Strengthen the Ownership–Performance Nexus? Evidence from Emerging Markets

This study examines the relationship between ownership structure and firm performance in Jordan and investigates the m role of audit committee presence in these relationships. Using a balanced panel of non-financial firms listed on the Amman Stock Exchange over the period 2012–2021 (40 firms and 400 firm-year observations), the study considers three dimensions of ownership structure: managerial ownership, family ownership, and ownership concentration. Firm performance is assessed using both accounting- and market-based measures, namely return on assets (ROA), return on equity (ROE), and Tobin’s Q. Fixed- or random-effects panel regression models, selected using the Hausman test and estimated with firm-clustered standard errors, are employed, and the moderating role of audit committees is tested using interaction terms. The findings reveal heterogeneous effects of ownership structure on firm performance. Managerial ownership is negatively associated with ROA but positively associated with Tobin’s Q, indicating a potential trade-off between managerial entrenchment and incentive alignment. Family ownership exhibits a positive and significant association with all three performance measures, consistent with the stewardship perspective and the long-term orientation of family-controlled firms. Ownership concentration is positively associated with ROE and Tobin’s Q, consistent with the monitoring role of large shareholders. The positive associations of family ownership and ownership concentration with all three performance measures, and the positive association between managerial ownership and Tobin’s Q, are significantly stronger in firm-years in which an active audit committee is present. In contrast, the attenuation of the negative association between managerial ownership and ROA in such firm-years is only marginally significant. These findings suggest that the performance implications of ownership structure may depend not only on the identity and concentration of shareholders but also on the presence of internal monitoring mechanisms. The study contributes to the corporate governance literature by providing evidence from Jordan, an emerging market characterized by concentrated and family ownership.