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This paper examines the efficiency of the Jordanian stock exchange and the relationship between returns and conditional volatility. An AR(1)-GARCH(1,1)-M model is estimated for five daily indices. The empirical results indicate significant departures from the efficient market hypothesis; in only two cases there is a significant relationship between risk and return, and returns tend to exhibit high persistent volatility clustering.

The capital structure choice has generated a lot of interest in the corporate finance literature. This interest is due to several reasons including the fact that the mix of funds (leverage ratio) affects the cost and availability of capital and thus, firms’ investment decisions. To date, much of the empirical research has been applied on companies listed on advanced stock markets. This literature considered a variety of factors such as company size, profitability, asset tangibility, firm growth prospects and ownership structure as possible determinants of the capital structure choice. This paper examines the finances of Jordanian listed companies and the impact of their ownership structure on the capital structure choice. Based on a panel data methodology (1995-2003), the results indicate that while Jordanian companies are not highly leveraged, their ownership structure does have a significant impact on capital structure, and that much of the main-stream determinants of capital structure are applicable to the Jordanian scene.

The financial economics literature has given the capital structure choice of firms a lot of attention. Indeed, this literature includes not only econometric analysis of the determinants of capital structure, but also surveys of Chief Financial Officers on this financial decision. This paper reports the leverage ratios of listed Saudi and Palestinian non-financial firms and examines whether the differences in the determinants of their ratios are due to firms-specific factors, or countryspecific difference. Based on a total of 55 listed Saudi firms and 18 listed Palestinian firms during the period 2006-2012, and using the Seemingly Unrelated Regression, and Panel data Analysis, the results indicate that factors like asset structure and firm profitability impact the capital structure of both sets of firms. However, the differences in their impact are due to country-specific and not firm-specific factors. This result is not really surprising given that both sets of firms operated under different political and economic circumstances.

The aim of this study is to examine listed Jordanian firms in terms of the issue of dividend policy stability. In more specific terms, the paper complements the econometric analysis of dividend stability with a survey of the Chief Financial officers (CFOs).

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Relative to the recent performance of the Jordanian economy, it can be argued that the private sector must be encouraged to increase investment levels. Indeed, the central idea behind the establishment of the Jordanian capital market in 1978 was to promote savings by activating and encouraging investment in bonds and shares and to direct such savings to serve the development of the national economy. The fact that firm investment is an important indicator of the health of economies, this study investigates the investment behavior of listed Jordanian industrial firms during the period 2000-2013. Based on the financial statement of 52 listed industrial firms and panel data analysis, the empirical results indicate that firm investment does respond to stock market valuation (Tobin's Q). On the other hand, firm's leverage does not have a significant effects on firm investment. Based on these outcomes, one can argue that the pricing efficiency of the listed firms' stock is extremely important.

Relative to the numerous papers which examine the performance of banks, one of the most important key features of the evolution of foreign direct investment (FDI) flows in recent years has been the increasing proportion of FDI in the service (including banking) industry. This is why the financial economics and finance literatures include a growing number of researches that examine the effect of the entry of foreign banks on domestic bank's performance in terms of, for example, their net interest margin and competition. This paper analyzes the issues of net interest margin and competition in the Jordanian banking system during the time period from 2000 to 2010. In more specific terms, the paper examines the impact of the entry of foreign banks on the behavior of bank spreads and the extent of competition.Using a panel of bank-level data, the results indicate that while well-known determinants of net interest margin are appropriate to the Jordanian scene, the effect of the entry of foreign banks on the cost of financial intermediation has not been positive. In addition, based on a non-structural measure of competition (H-statistic), the results indicate that foreign banks have not led to any significant improvement in the monopolistic competition condition that prevails in the Jordanian banking sector.