Basem Hamouri

Past studies have mostly investigated the significance of financial attributes in trade affairs of developed countries, while dismissing such importance among developing nations. As such, this study looked into the influence of financial leverage upon the growth of Jordanian firms. For that purpose, a sample of 91 firms from Jordan had been analyzed via panel data regression method for the period between 2006 and 2015. As a result, the findings portrayed the irrelevance between financial leverage and growth of assets, but a significantly positive correlation with the growth of sales and employment. On top of that, this study revealed that growth of sales and employment had been significantly and positively correlated with firm size. In short, this study dismissed the speculation the constraint Jordanian firms were in, but on the contrary, displayed the ability to gain external financing to ascertain successful progress.

This paper observes the dynamic impact of market risks on the profitability of banks listed on the Amman Stock Exchange (ASE) from 2010 to 2018 in Jordan. To identify the link, the relevant data were retrieved from the annual statements of Jordanian banks and one-step Generalized Method of Moments (GMM) approach was employed to diagnose the error regarding endogeneity. The results of the applied methodology showed that market risks impacted the profitability of Jordanian banks. Furthermore, the study also presented factors that affected the banks’ profitability, such as capitalization and bank size. The previous year profitability has a positive effect on the next year profitability. Moreover, stock market returns (SMRs) directly affect ROA and ROE because when SMRs enhances, bank profitability will increase. Bank managers should ponder the volatility of the market risk while enhancing the profitability of a bank. This relationship of the variables regarding Jordanian banks listed on the ASE was not considered before in the financial economics literature. Recommendations were also provided for Jordanian bank managers to mitigate market risks.