The influence of corporate governance and ownership structure on information asymmetry in emerging markets: evidence from Jordan

This study examines how corporate governance mechanisms and ownership structure influence information asymmetry among non-financial firms listed on the Amman Stock Exchange (ASE). Drawing on agency theory, institutional contingency theory, Query the principal–principal perspective, and structural information asymmetry theory, the study positions Jordan as a boundary-condition setting in which concentrated ownership, weak minority-investor protection, uneven enforcement, and limited market liquidity shape the effectiveness of governance mechanisms. Using hand-collected panel data for 108 non-financial ASE-listed firms over 2010–2022, information asymmetry is measured using bid-ask spread, zero-return days, and the Amihud illiquidity ratio. The baseline analysis employs year- and industry-fixed effects models, with two-stage least squares (2SLS) used as a robustness check for potential endogeneity. The results show that ownership concentration is positively and significantly associated with all three information asymmetry measures, making it the most consistent ownership-based predictor of market opacity. Managerial ownership is positively associated with bid-ask spreads, but not with zero-return days or illiquidity, suggesting that its effect is concentrated mainly in quoted trading frictions. The largest outside blockholder is negatively associated with zero-return days and illiquidity, indicating a partial monitoring role. Foreign and institutional ownership are not consistently associated with information asymmetry. Board-level mechanisms also show limited and inconsistent effects. Overall, the findings suggest that, in Jordan, ownership concentration and blockholder control are more relevant than formal board attributes in shaping the market information environment. The study contributes to emerging-market governance research by showing that standard agency-theory predictions depend on institutional context.