IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2020-02-27.html
   My bibliography  Save this article

Financial Performance as Mediator on the Impact of Investment and Financial Decisions on Stock Price and Future Profit: The Case of the Jordanian Financial Sector

Author

Listed:
  • Zaher Abdel Fattah Al-Slehat

    (Department of Management, Faculty of Economics and Business, Mulawarman University, Samarinda, East Borneo, Indonesia.)

Abstract

The current study investigates the effect of investment and financial decisions on stock prices and future profits in the presence of financial performance as an intermediate variable. Thus, the case of the Jordanian banking and insurance sector is analysed. The sample includes 13 banks and 10 insurance companies from 2009 to 2018. A structural equation modeling analysis is conducted using the AMOS 23 software to test the hypotheses and validate the model. Financial decision exhibits no effect on future profits and stock prices, whereas investment decision affects future profits and stock prices. Financial performance is considered a mediator in the effect between financing decision and future profits. By contrast, financial performance fails to mediate the impact of financial decision and stock prices. In addition, it cannot mediate the effect of investment decision on future profits and stock prices.

Suggested Citation

  • Zaher Abdel Fattah Al-Slehat, 2020. "Financial Performance as Mediator on the Impact of Investment and Financial Decisions on Stock Price and Future Profit: The Case of the Jordanian Financial Sector," International Journal of Economics and Financial Issues, Econjournals, vol. 10(2), pages 242-247.
    • Handle: RePEc:eco:journ1:2020-02-27
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/9520/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/9520/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Birca Aliona, 2016. "Financial Performances Measurement Tools," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 169-173, June.
    2. repec:hur:ijaraf:v:4:y:2014:i:2:p:76-84 is not listed on IDEAS
    3. Zaher Abdelfattah Alslehat & Farouq Rafiq Altahtamouni, 2014. "The Causal Relationship between Financial Decisions and Their Impact on Financial Performance," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 72-80, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zodwa Z. F. Mthiyane & Huibrecht M. van der Poll & Makgopa F. Tshehla, 2022. "A Framework for Risk Management in Small Medium Enterprises in Developing Countries," Risks, MDPI, vol. 10(9), pages 1-18, September.

    More about this item

    Keywords

    Investment Decision; Financial Decision; Financial performance; Stock Price; Future Profit;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2020-02-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.