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Towards More Understanding of the Financial Leverage Controversy: The Evidence of the Industrial Firms at Amman Stock Exchange

Author

Listed:
  • Mohammed Abdullah Al-Momani

    (Department of Accounting, School of Economics and Business, Jadara University, Irbid, Jordan)

  • Mohammed Ibrahim Obeidat

    (Department of Business Administration, Al Ain Camus, Al Khawarizmi International College, United Arab Emirates)

Abstract

The study objects for investigating the most important internal determinants of financial leverage of the listed industrial firms at Amman Stock Exchange (ASE). It is a cross sectional study that it used the issued data of the total listed industrial firms at ASE, where the total number of these firms till the end of 2015 is 48. 7 independent variables the study takes into consideration including firms' size, liquidity, profitability, assets tangibility, earnings volatility, growth opportunities, and non-debt tax shield. Descriptive statistics, and simple and multiple linear regression methods are used in hypotheses testing. The study shows that liquidity, profitability, tangibility, each of which, have a significant impact on earnings volatility, where other independent variables that the study took into consideration, have no impact.

Suggested Citation

  • Mohammed Abdullah Al-Momani & Mohammed Ibrahim Obeidat, 2017. "Towards More Understanding of the Financial Leverage Controversy: The Evidence of the Industrial Firms at Amman Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 189-198.
    • Handle: RePEc:eco:journ1:2017-04-26
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    References listed on IDEAS

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    Cited by:

    1. Emmanuel Dele Omopariola & Abimbola Windapo & David John Edwards & Hatem El-Gohary, 2021. "Level of Financial Performance of Selected Construction Companies in South Africa," JRFM, MDPI, vol. 14(11), pages 1-18, October.

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    More about this item

    Keywords

    Financial Leverage; Capital Structure; Assets Tangibility; Non-debt Tax Shield; Earnings Volatility; Return on Assets;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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