The Effect of Firm's Age, Size and Growth on Its Profitability: Evidence from Jordan

Abstract

This study aims at testing the effect firm's age, size and growth on its profitability based on the financial data of (22) Jordanian insurance firms that are registered in the Amman Security Exchange (ASE) during the period (2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017). They represent 95.2 % of insurance firms. The study relied on secondary data of insurance firms that have been published on their website and on ASE website In the study, the mean, standard deviations were used to describe the characteristics of the variables. Simple regression analysis was used to test the study's hypotheses.Simple. the skewness test of all variable is used to know if they have a normal distribution.The study shows that there is an insignificant effect of the insurance firm's age, size, and growth on its profitability. It recommends financial managers to analyze the relationship between a firm's age, size, growth, and profitability before making any decision in the fields of expanding business, renewing assets, manufacturing high-quality products and appointing new employers. In a recession period, managers should not adopt a strategy to achieve high growth in the short run, they should also reduce the size of the firm's operations. These procedures are important for these firms to maintain a balance between growth and profitability.

Increasing Company Value in Times of Environmental Uncertainty

“…Therefore, the larger the company size, the more positive signals it can provide. The results of this research support the research of Rahman and Yilun [28], Al Nawaiseh [29] and Kartiningsih and Daryanto [30], who stated that company size has a significant positive influence on the company's Return On Assets (ROA). b.…”

“…Rahman and Yilun [28]; Al Nawaiseh [29]; Kartiningsih and Daryanto [30] revealed that company size has a positive effect on profitability. This statement means that the profitability will also increase if the company's size grows.…”

The effect of a firm’s internal factors on its profitability: Evidence from Jordan

“…However, these studies did not clarify which internal factors have the most significant effect on a firm's profitability (Škuflć et al, 2016). Nevertheless, few previous studies have been conducted on emerging markets, testing the effect of internal factors on profitability for more than one industry, and this also includes the Jordanian context (e.g., Bhayami, 2010; Malik, 2011; Jaber & Al-khawaldeh, 2014; Pratheepan, 2014; Kaddumi & Ramadan, 2012;Al-Nawaiseh, 2020). To the best of the authors' knowledge, investigating the effect of internal factors on a firm's profitability for all listed firms and all types of industries within the corporate sector has not been examined before in Jordan.…”

The Effect of Islamic Corporate Governance, Firm Characteristic on Capital Structure and Financial Performance of Sharia Commercial Banks Registered the Financial Services Authority

“…The study found that Firm Chaecteristic has an insignificant effect on Financial Performance, is corroborated by past studies done by Megawati and Dermawan (2019) in their research stated that firm age has an insignificant effect on firm performance. Nawaiseh (2020) in his research stated that there was an insignificant effect of company age and company size on profitability. The findings of this study indicate that the age and size of the company is not a guarantee that the company will have Dian Ferriswara, Okta Karneli, Bibi Noraini Mohd Yusuf (2024) good performance.…”