This paper aims to assess the effect of working capital management (WCM) on the performance. Utilizing unbalanced data for a sample of 49 Jordanian Industrial corporations listed at Amman Stock Exchange -2005 to 2009. Using two alternative measures of profitability as proxy for the performance and five proxies for the Working Capital Management, estimation of twenty models panel data cross-sectional time series have been tested employing two regression models; the Fixed-Effects Model and the Ordinary Least Squares Model. The findings of our study found to be significantly consistent with the view of the traditional working capital theory. The results suggest that working capital management and performance are positively correlated. The regression results also concluded that the Jordanian industrial firms follow a conservative investing policy and less aggressive financing policy in the working capital, and a well-efficient managing of the working capital can add value to the shareholders wealth.
All economic sectors and individuals in Jordan rely mainly on banks to cover their shortage in money, thus banking sector plays a vital role in enhancing investments and economic development by standing in the middle between deficit units and surplus units. The major goal of this study is to identify what are the main drivers that impact lending behavior in Jordan. Using panel data and applying multi regression analysis on (13) Jordanian Conventional banks and two Islamic banks for the period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013) that are covered in this research, we found that lending behavior is statistically significantly affected by internal factors (DV, IR and net profit after tax) and it is also affected significantly by external factor (RR, GDP, IFR, OWDR and Red. R). Also the analysis indicated that OWDR and Red. R as a proxy for monetary policy did have a negative impact on lending behavior but not significantly proven. The study also reached to a conclusion that the amount of loans and advances extended by Jordanian banks is not affected by rate of interest. We recommend that Jordanian banks' management should take into consideration internal specific factors as well as external specific factor with more care while formulating their lending policy, moreover central bank in cooperation with the Jordanian banking sector should work in more productive relationship in order to enhance more the economic growth.
The main purpose of this study is to investigate the relationship between financial stability and banking soundness in Jordan. For this purpose, the study mainly uses the FMOLS approach in addition to other analysis techniques and tools. The outcomes of the descriptive analysis show that the Jordanian financial system seems stable, and the indicators of banking soundness signal a steady and solid banking sector. The cointegration tests indicate that the considered variables have a long-term equilibrium relationship; the variables move together in the long term. The empirical results reveal that the majority of the banking soundness indicators have a positive impact on financial stability. This asserts that a sound banking sector plays a vital role in maintaining a stable financial system. However, the findings also indicate that a steady interest rate policy is one of the significant requirements for sustaining the stability of financial systems. Moreover, the response of financial stability with respect to economic growth changes is found to be positive and relatively high. On the fact of the importance of the topic under study, since financial stability is one of the major concerns of the authority bodies, the empirical findings can have very important policy implications for decision-makers.
How is stock market price volatility affected, and what is the nature of the impact that macroeconomic variables do on the stock market price direction? The main objective of this study is to investigate the impact of some selected macroeconomic variables (inflation rate (INR), interest rate (IR), economic growth rate (EGR), and foreign investment (FI)) on Amman Stock Exchange (ASE) fluctuation for the period 1999–2018. The information is based on the annual data published by industrial companies listed at ASE. The study adopted a descriptive-analytical approach, also simple and multiple linear regression analysis was employed for the mentioned purpose (Nurfadilah & Samidi, 2017). The results revealed that there is no statistically significant impact of INR, IR, EGR, and FI collectively on ASE performance (Niewińska, 2020). Individually, the results indicated that there is a statistically significant impact of all variables (INR, IR, EGR, and FI) on ASE performance. Additionally, the results concluded that foreign investment, portrayed the highest impact factor on ASE performance, followed by a change in average interest rate, then inflation rate, and the least impact attributes to the economic growth rate. Finally, the research recommends that Jordanian banks should reduce the lending interest rate to enhance investment in securities and improve economic growth rate, also Jordanian authorities should encourage foreign direct and indirect investment and make more efforts to attract more foreign investment, either in the form of tax incentives or by extending finance at low-interest rates.
This paper provides evidence that institutional investors show preferences for large capitalization stocks, with good financial performance, high degree of leverage, low trade frequency, low annual return, and low price to book value ratio. Dividend Yield and stock volatility as measured by the standard deviations of daily prices do not seem to play an important role in institutional choice. The prudent man rule and fiduciary responsibilities of institutional managers might be good reasons to explain our findings. Keywords: Jordanian Stock Market, Institutional ownership and preferences IntroductionInstitutional investors, as generally defined, are large investors who exercise discretion over the investments of others (Note 1). Recently, institutions account for over 43.4 percent of trading in the Jordanian stock market. Stock exchanges may be interested in institutional preference for the purpose of attracting institutional order flow, without discrimination on the type of institutions.Part of the recent Finance literature analyzes the determinants of shareholdings by institutional stockholders. For example, Grinstein and Michaely (2005) present evidence suggesting that institutions tend to avoid stocks that do not pay dividends. Among stocks that pay dividends, institutions tend to hold more of those that pay lower dividends. Institutions also prefer firms that repurchase more stock.The literature on institutional preferences has used price per share, share turnover, and firm size as proxies for liquidity (see, for example, Bennett et al. (2003), Gompers and Metrick (2001), Del Guercio (1996), and Falkenstein (1996) and found that they affect institutional holdings. This paper investigated empirically the firm specific variables, which influence the investment decision of institutional investors. The share holding of the institutions is taken in percentage form to control the firm size. The relationship is observed through the correlation and regression coefficients.The rest of the paper proceeds as follows: section 2 presents literature review, section 3 contains a discussion of the hypotheses, section 4 discusses the methodology and variables, section 5 reviews results, section 6 concludes the paper. Literature ReviewAs the Jordanian equity market is growing, the trend and future prospects in domestic and foreign institutional investments has become a topic of great concern. The combination of institutions' better monitoring and information gathering abilities and the advantages some forms of payouts offer institutions (taxes, prudent man rule (Note 2)) have led some researchers to investigate the preferences of institutions when making investment decisions. Elyas et al, (2010) investigate the association between corporate firm performance and the level and stability of www.ccsenet.org/ijef
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