The Moderating Role of the Governance Index in the Relationship between Financial Risk Disclosure and Stock Liquidity: Evidence from Jordan

Abstract

This study aimed to examine the impact of financial risk disclosure on stock liquidity as well as the role of the governance index in enhancing this impact for industrial companies listed on the Amman Stock Exchange. The (35) industrial companies that were included in the sample of those listed on the Amman Stock Exchange from (2015 to 2019) and whose published annual financial statements were examined. Descriptive statistics measures were employed for data analysis, and the study hypotheses were tested using multiple linear regression analysis and interactive regression analysis. The study came to the conclusion that there is no statistically significant relationship between financial risk disclosure and the stock liquidity of industrial companies listed on the Amman Stock Exchange, and that the governance index has no statistically significant influence on enhancing this relationship. The study recommended the need for the responsible authorities to raise awareness among the management of industrial companies, of the importance of disclosing any financial risks they may be exposed to, and the disclosure of appropriate policies for managing financial risks, in addition to its awareness of the importance of disclosure On the items of governance, because of their role in building a positive image of the company and improving its performance and reputation.