This study aimed to investigate the determinants of institutional investors as a corporate governance index in
emerging markets using data from Jordan. The dataset covered all the non-financial Jordanian firms that
provided their financial identities without significant gaps for the period from 1994 to 2003. Accordingly 86 nonfinancial
firms were selected. In order to investigate the factors that may affect the investment decisions a panel
data system was used. The regression results of the pooled models, fixed effects models, and random effects
models showed that institutional investors in Jordan consider firms capital structure, profitability, business risk,
asset structure, asset liquidity, growth rates, and firm size when they take their investment decisions. In
addition, institutional investors in Jordan prefer to invest in services firms rather than manufacturing firms.
Furthermore, the study cannot find evidence of any significant relationship between firms' dividend policy and
institutional investors. Finally, the study investigated the factors that may affect the probability that institutional
investors control the firm. This paper showed the importance of studying corporate governance in Jordan and
recommends more research to be done in this field to highlight the corporate governance debate using
emerging markets such as Jordan.