The Dual Impact of Decentralization and Business Complexity on Corporate Governance Effectiveness رسالة دكتوراة

Abstract

This study provides a comprehensive empirical investigation into the individual and combined effects of Business Complexity (BC) and Decentralization (DEC) on Corporate Governance (CG) effectiveness within the distinct institutional contexts of two emerging Arab markets. The study employs a rigorous quantitative methodology, analyzing a sample of 158 non-financial firms (118 from ASE, 40 from PEX) for the fiscal year 2023. It introduces a novel, multi-dimensional Business Complexity Index (BCI) based on the International Standard on Auditing for Less Complex Entities (ISA-LCE, 2024), integrating both qualitative (e.g., organizational structure, nature of activities) and quantitative (e.g., sales volume, fixed assets) dimensions. CG is measured via a composite index of four pillars: Disclosure & Transparency, Board of Directors, Shareholders' Rights, and Permanent Committees. Decentralization is assessed through indicators of geographical dispersion and delegation of authority. The study concludes that in emerging markets with strong regulatory institutions (like Jordan), external pressures dominate governance outcomes, whereas in weaker institutional settings (like Palestine), internal organizational design, particularly decentralization, becomes a critical lever for enhancing governance.