Walid M. Masadeh
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The effect of a firm’s internal factors on its profitability: Evidence from Jordan
Firas Dahmash , Wasfi Al Salamat , Walid M. Masadeh , Hashem Alshurafat doi: http://dx.doi.org/10.21511/imfi.18(2).2021.11Investment Management and Financial Innovations Volume 18, 2021 Issue #2 pp. 130-143
Views: 1447 Downloads: 932 TO CITE АНОТАЦІЯThe aim of this study is to investigate the effect of a firm’s size, asset growth, asset tangibility, and financial leverage on profitability for all listed corporate firms in Jordan using unbalanced panel data (time series and cross-sectional) regression analysis for a sample of 1,663 observations over the period from 2011 to 2018. The overall results show a significant positive effect of a firm’s size and asset growth on profitability. However, asset tangibility presents a significant negative effect on profitability, while financial leverage has an insignificant positive effect on profitability. An analysis of each of the main sectors also point to a consistently positive effect of a firm’s size on profitability, while the results for growth in assets and financial leverage are nearly consistent with overall findings, but not those for asset tangibility. Furthermore, the sub-sample industry analysis reveals mixed results due to the different industry shapes and structures. This study is expected to be of value to firm managers, investors, researchers, and regulators.