Determinants of Market Stock Price: New Evidence from an Emerging Market

Authors

Ahmad Abdallah, Department of Accounting, Faculty of Business, Al-Zaytoonah University of Jordan, Amman, JordanFollow
Malik Abu Afifa, Department of Accounting, Faculty of Business, Al-Zaytoonah University of Jordan, Amman, JordanFollow
Isam Hamad Saleh, Department of Accounting, Faculty of Business, Al-Zaytoonah University of Jordan, Amman, JordanFollow
Fares Alsufy, Department of Accounting, Faculty of Business, Isra University, Amman, JordanFollow

Abstract

The current studys goal is to investigate the financial determinants of the market stock price in Jordan, which is an emerging market. It gives empirical evidence from the industrial companies listed on the Amman Stock Exchange. This research was carried out over nine years (2010-2018), with a panel data analysis of 57 industrial companies used during the period. The study sample consists of all of the companies in the population, for a total of 513 observations. In conclusion, the findings of the study reveal that the ratio of assets turnover, long-term debt-to-total assets ratio, earnings per share, return on assets, inventory-to-total current assets ratio, total current assets-to-total assets ratio, and total assets significantly affect the market stock price of Jordanian industrial companies; while the equity-to-total assets ratio and working capital ratio have no significant effect. These results are compatible with the pecking order theory and signalling theory. Besides, the shift in the market stock prices of Jordanian industrial companies is governed by financial indicators at a relatively high level. As a final point, these results can be used by financial analysts, investors, and other strategic decision-makers to boost the effectiveness and efficiency of the Jordanian financial market.

Recommended Citation

Abdallah, Ahmad; Abu Afifa, Malik; Hamad Saleh, Isam; and Alsufy, Fares (2022) "Determinants of Market Stock Price: New Evidence from an Emerging Market," Information Sciences Letters: Vol. 11 : Iss. 2 , PP -.
Available at: https://digitalcommons.aaru.edu.jo/isl/vol11/iss2/54