Amman Stock Exchange Research Articles

Investigating the mediating role of sustainability disclosure in the relationship between corporate governance and firm performance in Jordan

PurposeThis study aimed to investigate the effect of sustainability disclosure (SD) as a mediator for the relationship between corporate governance (CG) and the performance of firms listed on the Amman Stock Exchange (ASE).Design/methodology/approachThe study analysed 405 reports of firms listed on the ASE from 2014 to 2018. The direct and indirect impact of governance mechanisms on the firms' performance was examined using STATA 15. A four-step procedure for testing mediation was used to determine the mediating role of SD.FindingsThe results demonstrated that the board and audit committees' effectiveness positively and significantly influences the firm's performance. Additionally, the results demonstrated that SD partially mediates the relationship between CG and the firm's performance.Research limitations/implicationsResearch implications – This study supported the assumptions of agency, resource dependence and stakeholder theories as the basis to explain the relationship among board’s effectiveness, audit committee’s effectiveness, sustainability report and firm performance in developing economies. In addition, the results suggested that CG helps to enhance the firm's performance and sustainability reporting. Firms providing sustainable report are deemed more responsible and attract more returns to firms. Research limitations – The study only focused on reports from five years for non-financial firms listed on the ASE to test the assumed relationship between the variables.Practical implicationsThis study contributed to the body of knowledge by examining the mediating role of SD between CG and firm performance. Investors, managers and regulators can obtain further insights, especially those seeking to improve a firm's performance in the emerging markets, through a sound CG system and extensive sustainability reporting.Originality/valueThis study focused on the direct and indirect impacts of CG and firm performance in an emerging and developing economy. The study used SD as the mediating variable in examining the indirect effect.

The Effect of Size and Board Gender Diversity in Dividend Payout: An Applied Study on Service Shareholding Companies Listed in Amman Stock Exchange

This study aimed at identifying the effect of board size and board gender diversity on dividend payout and identifying the role of return on assets (ROA) in moderating the effect of size and board gender diversity on dividend payout. The study population consisted of (45) service shareholding companies listed in Amman Stock Exchange (ASE), during the period (2009-2018), using balanced panel data of (36) service companies with (360) observations. The results indicate that the level of female representation in the boards of service companies in Jordan is still low compared to other countries. The results also showed that board size and board gender diversity affect dividend payout. In addition, the return on assets moderates the effect of board size on dividend payout. The results also showed that the return on assets does not moderate the effect of board gender diversity on dividend payout. The study recommends that regulatory bodies should take a step towards encouraging gender diversity in boards to enhance board of directors' effectiveness, through amending legislations that regulate female participation in boards, such as the Jordanian Corporate Governance Code.

Financial Technology as a Basis for Financial Inclusion and its Impact on Profitability: Evidence from Commercial Banks

The purpose of this study was to show how financial technology tools can be used to reinforce financial inclusion indicators on the profitability indicators of a Jordanian commercial bank listed on the Amman stock exchange. Between 2010 and 2020, a quantitative and qualitative panel data set was used. The study population is represented by all the banks listed on the Amman stock exchange (n = 16). The study found that financial technology through its multitools changed the structure of the overall financial services, besides the diversity and style of financial services for the commercial banks' clients, thus reinforcing and increasing the availability for a wider social group that did not have access to that service. Further, it was found that there is a significant effect of the financial technology tools to reinforce the financial inclusion indicators over the studies' profitability indicators that include return on assets, return on equity, and earnings per share (JD). It is recommended to adopt effective and modern financial and technological strategies that provide marginalized social groups and small and medium enterprises reasonable access to the financial services and products that meet their needs, including transactions, payments, savings, credit, and insurance. Thus, getting the added value of the data and investing it to increase the financial inclusion indicators improves the profitability indicators and income for commercial banks. Keywords: Financial Technology, Profitability, Financial Inclusion, Commercial Banks.

The Interplay Amongst Internal Auditors’ Psychological Capital, Creative Performance, and Internal Control Efficiency

This study examined internal auditors’ psychological capital relationship with their creative performance. It also investigated the total effect of such a relationship on internal control efficiency related to targets’ achievement. The partial least squares structural equation modelling was employed to validate and test the study model, based on data collected from 118 internal auditors of companies listed on the Amman Stock Exchange. The main results indicate that internal auditors’ psychological capital positively influences their creative performance, indirectly enhancing the degree of internal control efficiency in achieving targets related to financial reporting, operations, and compliance. This study offers empirical evidence on the psychological capital value as an enabler to engage in creative performance and support the perpetual endeavours of those charged with governance to boost internal control efficiency. Also, the findings highlight the importance of providing internal auditors with the required resources and facilities to enhance their psychological capital and performance.

The Effects of Coronavirus on The Profitability of the Banks Operating in Jordan: An Empirical study

This paper investigates the impact of the COVID-19 pandemic on the profitability of the banking sector in Jordan, given the paucity of empirical research on the impact of the COVID 19 pandemic on profitability bank in the context of developing countries. To achieve the search objective, the study selects all Jordanian banks listed in Amman stock exchange during period from 2018 until the year of emergence of corona pandemic 2020 to cover the requirements of statistical and financial analysis. The results study show that the financial indicators extracted from the financial reports of Jordanian banks from 2018-2020 had a decline in value during the year 2020 which corresponds to the emergence of coronavirus pandemic which means that the first hypothesis is valid. Our analysis shows that net profit ant total revenue and provision for credit and return on equity affect significantly the profitability banks. The value of profitability banks at the Amman stock exchange amounts to 68.5 %, while the remaining of 31.5 % refers to other variables that were not included in the construction of the study model.
 Keyword: Profitability, Jordanian banks, coronavirus pandemic, financial reports, Amman stock exchange

Stock market performance: Reaction to interest rates and inflation rates

This paper investigates the wealth effects of the consumer price index, interest rate, domestic credit and real economic activity on the Amman Stock Exchange performance. Over the period 1991–2020 using the autoregressive distributed lag (ARDL) bounds test. While the interest rate is a powerful monetary tool to fight inflation and recession, it can be detrimental to investors. The target variables, consumer price index (CPI) and interest rate (IDR), are both highly significant with the correct signs. An increase of 1 percent in CPI and IDR leads to a fall in stock prices by 1.6 percent and 5 percent, respectively. While the central bank is targeting inflation by raising interest rates, its actions reflect negatively on the stock market. The short-run model confirms the causality from the independent variables to the dependent variable. Moreover, the error correction term (ECT) is very high and significant at the 1 percent level amounting to 83.3 percent, which confirms the evidence of the long-run relationship. Monetary objectives are really important, but financial stability is also important.

The Impact of Accounting Conservatism on Financial Performance in Services Companies Listed on Amman Stock Exchange

This study aimed to identifying the impact of accounting conservatism on financial performance in services companies listed on Amman Stock Exchange, where the accounting conservatism was measured through the model of (Gvoly & Hyans, 2000), an approach that based on accruals, while the financial performance was measured through the return on equity (ROE), and earnings per share (EPS). And in order to achieve the objectives of the study, the descriptive and analytical approach was adopted, where the study was conducted on a sample of (23) service companies listed on Amman Stock Exchange during the period from 2015 to 2019. Also, in respect of analyzing the study data and test its hypotheses, the statistical analysis program (SPSS) was utilized, and simple regression equation was relied on in testing the hypotheses. Whereas, the major findings of the study are as follows: There is no statistically significant impact of the accounting conservatism on the financial performance with its indicators (rate of return on equity, and profit per share) in the services companies listed on Amman Stock Exchange. Meanwhile, the study recommended the necessity of urging the researched and listed services companies’ management on Amman Stock Exchange (especially those characterized by low accounting conservatism) to apply the principles and standards of accounting conservatism, due to the importance of these procedures on the quality of the financial reports and consequently the profits therein.
 
 Received: 23 March 2022 / Accepted: 30 June 2022 / Published: 5 July 2022

The Association between Accounting Conservatism and Cash Holding, Dividends and Leverage

This paper examines the effect of accounting conservatism on several financial decisions in Jordan. In particular, it aims to expose the effect of accounting conservatism on cash holdings, dividends distributions, and leverage for a sample of 83 Jordanian industrial and service firms listed on the Amman Stock Exchange (ASE) for the period 2015-2019. The feasible generalised least squares (FGLS) regression technique is used to test the association between accounting conservatism and financial decisions. The findings of this paper reveal a negative and significant relationship between accounting conservatism and cash holding. However, positive but insignificant relationships are reported between accounting conservatism and both dividends distributions and leverage. These findings have important implications for investors, corporate managers, and policymakers. The study recommends that future research use different measures of leverage, such as debt-to-equity ratio and long-term debt to equity ratio, in order to compare the results of different measuring instruments. It also recommends incorporating other measures of conservatism, such as market to book ratio and timeliness asymmetric measure.
 
 Received: 23 March 2022 / Accepted: 20 June 2022 / Published: 5 July 2022

Evaluating Financial Performance of Jordanian Bank Listed on Amman Stock Exchange for the Period (2016-2020)

This study aims to identify the level of financial performance of Jordanian banks listed on Amman stock exchange during the period (2016-2020), using the financial ratios approved in assessing the financial performance of banks, to determine their performance during the study phase. Concerning the purposes of achieving the objective of the study, five financial ratios are extracted from the financial reports of the banks of the research sample for each year of the study: return on assets, return on equity, total assets to equity right ratio (equity multiplier), net profit margin and utility assets. The study noted that the financial performance of the Jordanian bank group during the period of the study was fragile, due to the high debt ratio and the low rates of return for these banks, this reflects the negative impact of the Corona crisis on the Jordanian economy represented by the increase of the volume of either internal or external debt, and the decrease in the proportion of foreign investment flows.
 
 Received: 22 February 2022 / Accepted: 7 June 2022 / Published: 5 July 2022

The Impact of the Repercussions of the Corona Virus (Covid 19) Pandemic on the Change in Stock Market Prices of Industrial Companies Listed on Amman Stock Exchange

This study aimed to identify the impact of the Corona Virus pandemic (Covid 19) on the change in the market prices of the shares of industrial companies listed on the Amman Stock Exchange. The study population consisted of (49) Jordanian industrial companies. The sampleof the study consisted of (33) companies listed on theAmman Stock Exchange Forthe period from 2017 – 2021. The study reached several results,most notably the presence of the impact of the Corona pandemic measured by the number of confirmed, cases of Corona and the number of days of partial or total ban on the change. in the market prices of the shares of industrial companies listed on the Amman Stock Exchange. The main recommendations of the study important of which is the need to focus industrial companies on the use of financial instruments that mitigate that will reduce the risks of a decrease in the market value of shares during financial crises. and to diversify the investments of these companies in a way that reduces the risks of stock price fluctuations. Key Words: Corona Virus (Covid -19),Market Price Per Share, Industrial Companies, Amman Stock Exchange, Jordan. DOI: 10.7176/JLPG/122-08 Publication date: July 31st 2022

أثر سيادة القانون على مؤشر أسعار الأسهم في بورصة عمان (الأردن): دراسة قياسية (1998-2017)

This study aimed to investigate the impact of Rule of Law on the stocks’ price index in Amman Stock Exchange over the period (1998-2017). Several diagnostic tests have been applied, such as Augmented Dickey-Fuller (ADF) for stationarity. The results have shown that the time series of the real interest rate is stationary at its levels, i.e. I (0), whereas the stocks' price index, indirect foreign investment, and rule of law are stationary at their first differences, i.e. I (1). While the real GDP is found to be stationary at the second difference, i.e. I (2). Vector autoregression model (VAR) is used in estimation. The study utilized two major tools for analysis: Variance Decomposition and Impulse Response Function.
 The study found a positive impact of the rule of law on the stocks’ price index in Amman Stock Exchange. Based on the findings, the study recommended the need to implement laws and regulations to improve the stocks’ price index in Amman Stock Exchange in Jordan.
 Keywords: Rule of Law, Stocks’ price index, Jordan.

Impact of Technological Burden on Knowledge Management Functions in Jordanian Industrial Companies

The goal of this study is to see how electronic information overload affects knowledge management functions in Jordanian businesses. All Jordanian industrial enterprises registered on the Amman Stock Exchange were included in the study’s sample. Three hundred and seventy-three people were chosen at random from a simple random sample of 30% of the study population of 1242 senior and intermediate managers in the research community. Following the retrieval of the surveys, 206 questionnaires were found to be valid for analysis. It was used to do descriptive and heuristic statistical procedures, like simple and multiple regression analysis. The SPSS.16 application was used to do this. The study ends with the following findings: Electronic information overload (technological overload) has a statistically significant influence on knowledge management functions (acquisition, generation, transmission, exchange, and application) in Jordanian industrial companies. This work made a number of recommendations as a result of its findings, including: Adopting an organizational aspect that suits the nature of the tasks that industrial companies in Jordan perform, as well as providing technical capabilities to reduce the electronic information overload that these companies face while performing their tasks.

Does media exposure moderate the relationship between ownership structure and environmental disclosure quality: evidence from Jordan

PurposeGiven the increasing emphasis on environmental issues, this study attempts to offer concrete evidence on the relationship between ownership structure and environmental disclosure quality and whether media exposure moderates this relationship.Design/methodology/approachThe sample adopted in this study includes a group of 94 Jordanian companies listed on the Amman Stock Exchange from 2010 to 2016. Data about companies' environmental disclosure were manually collected using the content analysis method.FindingsOur findings reveal that increasing the levels of ownership concentration and management ownership can negatively impact the quality of environmental reporting among companies in Jordan. This type of reporting, however, is likely to be benefited from the presence of a high level of foreign ownership. In terms of the role played by media, media coverage may act as a buffer against the negative relationship between environmental reporting and ownership concentration and management ownership. On the other hand, the relationship between foreign ownership and environmental reporting remains positive and significant no matter the amount of media attention the company is receiving.Originality/valueThis study is crucial because it contributes to the existing environmental debate studies in two crucial ways. It first offers the first evidence on how media exposure can moderate the relationship between ownership structure and environmental disclosure. Second, this study's findings provide important implications for regulators and policymakers in Jordan.

The Impact of Corporate Governance on Financial Performance: A Comparative Study among Palestinian and Jordanian Banks

Corporate governance has gotten a lot of attention recently. In most of the world's countries, the companies are intending to increase the efficiency of their work and management, and hence their profits and success rates. This research aims at examining corporate governance's impact on financial performance. It also makes a comparison in the context of Jordan and Palestine. This study also focuses on the board of directors' characteristics in terms of board size, independence, meetings, qualifications, and gender diversity methods of internal governance. To assess the firm's performance, four indicators were employed: Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), and Operating Cash Flow (OCF). The researchers' views varied to classify the role of the board on financial performance, which represents a key element in corporate governance. This study is applied to the Jordanian banks on the Amman Stock Exchange in addition to the Palestinian banks on the Palestine Stock Exchange in the period 2012 to 2019. The SPSS software is used to perform the statistical analysis and check the research hypotheses using descriptive statistics, multicollinearity tests, and OLS regression. The results of the study show variations in board characteristics impact firm performance in the context of Jordan and Palestine. However, there are consistent results. As the regression found, the size of the board and gender diversity have a significant and negative impact on firm performance in the context of both Jordan and Palestine. The regression also found that board independence has a significant and positive impact on firm performance in the context of both Jordan and Palestine. The results of the study also show that there are differences in the governance structures applied in Jordan and Palestine. The findings show how the organization of the board affects the company's performance, which is considered useful information for policymakers.

TheImpact of Dividends Distribution Policies on Trading Volume of Shareholding Companies in Amman Stock Exchange (ASE)

TheImpact of Dividends Distribution Policies on Trading Volume of Shareholding Companies in Amman Stock Exchange (ASE)

DAY OF THE WEEK EFFECT ON STOCKS’ RETURNS: EVIDENCE FROM AMMAN STOCK EXCHANGE (JORDAN)

This study aims to identify and explain the effect of the day of the week on the return of stocks listed on the Amman Stock Exchange (ASE), where some days of the week have higher/lower returns than others. It also aims to find if the market follows a significant pattern and determine whether the day of the week anomaly exists over the study time. Using the Free Float Index ASE100 through all days of the week from 2011 to 2019, the study adopted a descriptive-analytical approach; also, data analysis includes an Ordinary Least Square statistical approach. Results indicated that the study's data is normally distributed using the Kolmogorov-Smirnov test; moreover, it was observed that there was a difference in stocks' returns based on the difference in weekdays. In addition, there is the day of the week effect on the return of stocks listed on ASE, where Thursday was the highest return, which was due to the instructions of criteria for the solvency of brokerage companies operating on the stock exchange that states all brokers shall collect the balances of accounts receivables resulting from buying securities on credit within one week. As a result, Wednesday ranks second to Thursday in returns. Additionally, the results concluded that there is no effect of two days in a week on returns of stocks listed on ASE represented by Sunday and Monday, where Tuesday mediate the working days in the week. The study recommends investigating other anomalies that might affect ASE, using the same index and other indexes that, perhaps, unexpected outcomes will be presented, especially since ASE is an emerging market.

EVALUATING THE EFFICIENCY OF JORDANIAN COMMERCIAL BANKS BEFORE AND DURING THE COVID-19 PANDEMIC

The current research aims to investigate the financial management of Jordanian listed banks during the COVID-19 pandemic to identify the impact of the COVID-19 pandemic on the financial management efficiency of Jordanian banks during the pandemic. In addition, this research is based on a quantitative research approach as it incorporates financial management factors, including liquidity management, return on equity, return on assets, and financial performance, for identifying the efficiency of Jordanian banks during the COVID-19 pandemic. The analysis shows the financial indicators of banks listed on the Amman stock exchange. It has been found that the pandemic has affected the financial performance of these banks. On one side, although the total asset (size) of the banking sector is found to be increased on the other side, the debt ratio has also been increased, and it has created a significant negative impact on the financial performance. Hence, the findings indicate that the Jordanian government and the central bank of Jordan are still required to work on enhancing the financial performance of the financial sector in Jordan, as well as they should work on eliminating the impact of COVID-19 on the financial sector. Moreover, the reforms introduced by the Central bank of Jordan have a significant role in having this efficiency by the listed banks. This paper has highlighted that Jordan has a strong banking system that can cope with such uncertain situations due to its efficient financial management practices. The Jordanian government should further enhance the capabilities of the Jordanian banking sector through effective reforms to further contribute to the country's economic development.

Firm Value, Size, Liquidity and the Adoption of Common Accounting Standards: Evidence from Firms Listed on the Amman Stock Exchange

Adopting common accounting standards presents both benefits and challenges to firms and the resultant effects of such adoption vary between firms and countries. The value of firms revolves considerably around the adoption of common accounting standards, firm and country specific factors. Consequently, this study examines the firm size, liquidity and the adoption of common accounting standards on the value of capital and debt market firms listed on the Amman Stock Exchange. A Fixed Effect Model was estimated using data collected from 5 capital market firms and 4 debt market firms listed on the Amman Stock Exchange in Jordan. The data was from the period 2009 to 20018 and was analysed using the aid of Eviews 10. The findings revealed that there is a positive relationship between firm size, liquidity and performance, and stock prices. The disclosure of financial information and an improvement in earnings per share were noted to be causing a decline in stock prices of capital and debt markets in Jordan. Practically, the study implies that sound liquidity, asset and performance management strategies are vital for improving the value of capital and debt market firms listed on any stock exchange. The study also reiterates that improvements in firm value are vital for improving social and economic aspects in any economic context.

Factors Affecting Successful Recruitment Strategies for Individuals With Autism Spectrum Disorder in the Jordanian Companies Listed on the Amman Stock Exchange

This study aims at identifying the factors affecting successful recruitment strategies for individuals with autism spectrum disorder in the Jordanian companies listed on the Amman Stock Exchange (ASE). The analytical descriptive approach is followed in analyzing the study population, which included general managers of these companies as well as human resources managers in the companies in which this position exists. A total of 339 managers were selected in a comprehensive inclusion approach. The number of valid questionnaires is 300, with an estimated rate of 88.4%. The study concluded that there is a significant effect for both internal and external factors separately and collectively on the successful recruitment strategies and that the effect of internal factors on successful recruitment strategies is greater than the effect of external factors in the successful recruitment strategies of individuals on the autism spectrum. One of the most important recommendations of the study is to pay attention to both internal and external factors when adopting any recruitment strategies for individuals with autism spectrum. A national plan at the level of the Hashemite Kingdom of Jordan (HKJ) should be adopted taking into account the treatment of social incompetency, post-secondary education, and dealing wisely with the cases of common morbidity. The HKJ government must intervene to enact the necessary legislation and encourage the private and mixed sector enterprises to play their role in providing job opportunities for these individuals. In addition, there is a need for more studies on this sensitive topic in different work environments.

The Impact of Amman Stock Exchange Simulation Room on the level of the Business College Students at Al-Zaytoonah University of Jordan (Predictive Approach)

The traditional education system is relying on the one-way transfer of information. Moreover, in past decades’ students were taught only the theoretical aspects of education which is not enough at the higher education level Interactive Learning is a pedagogical approach that incorporates social networking and urban computing into course design and delivery. Interactive Learning has evolved out of the hyper-growth in the use of digital technology and virtual communication, particularly by students. The results show that the interactive system of education has a couple of advantages for students and teachers. Firstly, it promotes the use of technology in education and maintains the social and interactive environment in class. Secondly, an interactive session grabs the attention of students because of the strong relationship with the instructor.