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The Retained Earnings Effect on the Firm’s Market Value: Evidence from Jordan

Author

Listed:
  • Firas N. Dahmash

    (Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan)

  • Hashem Alshurafat

    (Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan)

  • Raed Hendawi

    (Faculty of Economics and Administrative Sciences, Yarmouk University, Irbid 21163, Jordan)

  • Abdallah Bader Alzoubi

    (Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan)

  • Hamzeh Al Amosh

    (Ministry of Education and Higher Education, Doha 35111, Qatar
    Faculty of Business and Management, University Sultan Zainal Abidin, Campus Gong Badak, Kuala Nerus 21300, Malaysia)

Abstract

The aim of this study was to investigate the effect of the retention per share compared to the dividend per share by modeling the firm’s market value as a function of the retention per share and the dividend per share for all firms in the Jordanian context using unbalanced panel data analysis for a sample of 2281 firm years covering the period from 2010 to 2021. The results of the pooled sample indicated a strong positive significant effect for dividends per share. However, the retention per share indicated a negative significant effect on the firm’s market value. The other robustness analysis for the two sub-samples and the financial and non-financial sub-samples indicated the same results, consistent with the pooled sample for the two main explanatory variables.

Suggested Citation

  • Firas N. Dahmash & Hashem Alshurafat & Raed Hendawi & Abdallah Bader Alzoubi & Hamzeh Al Amosh, 2023. "The Retained Earnings Effect on the Firm’s Market Value: Evidence from Jordan," IJFS, MDPI, vol. 11(3), pages 1-11, July.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:3:p:89-:d:1186191
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    References listed on IDEAS

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