Earnings and market ratio: Additional evidence from Jordanian banks
The primary objective of this study is to investigate the correlation between profitability and the banks market value, while controlling for bank size as indicated by total assets. Two main models are analyzed, namely the benchmark model and the main model, to estimate the impact of high and low pr...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2023-07-01
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| Series: | Banks and Bank Systems |
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| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18457/BBS_2023_03_Shubita.pdf |
| _version_ | 1797784005750292480 |
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| author | Mohammad Fawzi Shubita |
| author_facet | Mohammad Fawzi Shubita |
| author_sort | Mohammad Fawzi Shubita |
| collection | DOAJ |
| description | The primary objective of this study is to investigate the correlation between profitability and the banks market value, while controlling for bank size as indicated by total assets. Two main models are analyzed, namely the benchmark model and the main model, to estimate the impact of high and low profitability on market value. The sample for this study consists of Jordanian banks covering the period from 2010 to 2020. The study results reveal that banks with high profitability exhibit a higher market value compared to those with low profitability, underscoring the crucial role of profitability as a determinant of bank value. Furthermore, the study establishes a link between low and high ROE and market value, indicating that variations in ROE significantly affect market value. Moreover, the study demonstrates a positive link between earnings and market value, emphasizing the significance of bank earnings in influencing market value. Lastly, the study emphasizes the role of bank size in shaping the link between ROE and market value, highlighting the importance of considering bank size when examining the link between profitability and market value.
AcknowledgmentI thank Amman Arab University for funding this research. |
| first_indexed | 2024-03-13T00:33:50Z |
| format | Article |
| id | doaj.art-65df54eb38e4484f93bcb3931e64f580 |
| institution | Directory Open Access Journal |
| issn | 1816-7403 1991-7074 |
| language | English |
| last_indexed | 2024-03-13T00:33:50Z |
| publishDate | 2023-07-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Banks and Bank Systems |
| spelling | doaj.art-65df54eb38e4484f93bcb3931e64f5802023-07-10T07:44:52ZengLLC "CPC "Business Perspectives"Banks and Bank Systems1816-74031991-70742023-07-01183142410.21511/bbs.18(3).2023.0218457Earnings and market ratio: Additional evidence from Jordanian banksMohammad Fawzi Shubita0https://orcid.org/0000-0001-7389-2108Ph.D., Professor, Accounting Department, Amman Arab UniversityThe primary objective of this study is to investigate the correlation between profitability and the banks market value, while controlling for bank size as indicated by total assets. Two main models are analyzed, namely the benchmark model and the main model, to estimate the impact of high and low profitability on market value. The sample for this study consists of Jordanian banks covering the period from 2010 to 2020. The study results reveal that banks with high profitability exhibit a higher market value compared to those with low profitability, underscoring the crucial role of profitability as a determinant of bank value. Furthermore, the study establishes a link between low and high ROE and market value, indicating that variations in ROE significantly affect market value. Moreover, the study demonstrates a positive link between earnings and market value, emphasizing the significance of bank earnings in influencing market value. Lastly, the study emphasizes the role of bank size in shaping the link between ROE and market value, highlighting the importance of considering bank size when examining the link between profitability and market value. AcknowledgmentI thank Amman Arab University for funding this research.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18457/BBS_2023_03_Shubita.pdfbank valuebanks sizeinformation contentJordanprofitability |
| spellingShingle | Mohammad Fawzi Shubita Earnings and market ratio: Additional evidence from Jordanian banks Banks and Bank Systems bank value banks size information content Jordan profitability |
| title | Earnings and market ratio: Additional evidence from Jordanian banks |
| title_full | Earnings and market ratio: Additional evidence from Jordanian banks |
| title_fullStr | Earnings and market ratio: Additional evidence from Jordanian banks |
| title_full_unstemmed | Earnings and market ratio: Additional evidence from Jordanian banks |
| title_short | Earnings and market ratio: Additional evidence from Jordanian banks |
| title_sort | earnings and market ratio additional evidence from jordanian banks |
| topic | bank value banks size information content Jordan profitability |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18457/BBS_2023_03_Shubita.pdf |
| work_keys_str_mv | AT mohammadfawzishubita earningsandmarketratioadditionalevidencefromjordanianbanks |