The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016)
This study aimed at measuring the impact of financial risks represented by (liquidity risk, credit risk and solvency risk) on the stocks return of Jordanian commercial banks. The study was conducted on the Jordanian banking sector consisting of thirteen Jordanian commercial banks during the period (...
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| Format: | Article |
| Language: | Arabic |
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University of Tamanrasset
2023-05-01
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| Series: | مجلة الاجتهاد للدراسات القانونية والاقتصادية |
| Subjects: | |
| Online Access: | https://alijtihed.univ-tam.dz/wp-content/uploads/2024/04/alijtihed-mag-035-art-013.pdf |
| _version_ | 1797224620220219392 |
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| author | Alaa A. Abu Aleem Mohamed Zaoui Jum’a M. Abbad |
| author_facet | Alaa A. Abu Aleem Mohamed Zaoui Jum’a M. Abbad |
| author_sort | Alaa A. Abu Aleem |
| collection | DOAJ |
| description | This study aimed at measuring the impact of financial risks represented by (liquidity risk, credit risk and solvency risk) on the stocks return of Jordanian commercial banks. The study was conducted on the Jordanian banking sector consisting of thirteen Jordanian commercial banks during the period (2007-2016). In order to estimate the impact of financial risk on stocks returns, the study used Panel data analysis method. In order to test hypotheses, based on the Hausman test the random effect model was used between independent variables (liquidity risk, solvency risk, and credit risk) and stocks returns.
The study reached several results: There is not a significant impact on liquidity risk on the stock returns and thus acceptance of the first hypothesis, the existence of a negative impact of the risk of banks' solvency on the stock returns and thus rejecting the second hypothesis, and there is significance negative impact of credit risk on the returns of stocks, the third null hypothesis is rejected. The study recommended the need to reduce the credit risk by studying the financial solvency of customers (debtors), By seeking more collateral to ensure that the reduced probability of default in repayment, Thus eroding the stock's returns in the Banks as a result of this, And the need for banks to improve the level of financial solvency because of a clear reflection on the confidence of customers, especially depositors, which means increasing the funds flowing to the bank and therefore on investments and stocks returns, And the need to focus commercial banks on the optimal choice between profitability and liquidity in order to achieve acceptable returns under the level of liquidity risk desired. |
| first_indexed | 2024-04-24T13:56:01Z |
| format | Article |
| id | doaj.art-944833a99da547e7bd04150ac173d699 |
| institution | Directory Open Access Journal |
| issn | 2335-1039 2437-0754 |
| language | Arabic |
| last_indexed | 2024-04-24T13:56:01Z |
| publishDate | 2023-05-01 |
| publisher | University of Tamanrasset |
| record_format | Article |
| series | مجلة الاجتهاد للدراسات القانونية والاقتصادية |
| spelling | doaj.art-944833a99da547e7bd04150ac173d6992024-04-03T17:47:25ZaraUniversity of Tamanrassetمجلة الاجتهاد للدراسات القانونية والاقتصادية2335-10392437-07542023-05-011202263285The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016)Alaa A. Abu Aleem0Mohamed Zaoui1Jum’a M. Abbad2Al Albayt university (Jordan)university Of OuarglaAl Albayt university(Jordan)This study aimed at measuring the impact of financial risks represented by (liquidity risk, credit risk and solvency risk) on the stocks return of Jordanian commercial banks. The study was conducted on the Jordanian banking sector consisting of thirteen Jordanian commercial banks during the period (2007-2016). In order to estimate the impact of financial risk on stocks returns, the study used Panel data analysis method. In order to test hypotheses, based on the Hausman test the random effect model was used between independent variables (liquidity risk, solvency risk, and credit risk) and stocks returns. The study reached several results: There is not a significant impact on liquidity risk on the stock returns and thus acceptance of the first hypothesis, the existence of a negative impact of the risk of banks' solvency on the stock returns and thus rejecting the second hypothesis, and there is significance negative impact of credit risk on the returns of stocks, the third null hypothesis is rejected. The study recommended the need to reduce the credit risk by studying the financial solvency of customers (debtors), By seeking more collateral to ensure that the reduced probability of default in repayment, Thus eroding the stock's returns in the Banks as a result of this, And the need for banks to improve the level of financial solvency because of a clear reflection on the confidence of customers, especially depositors, which means increasing the funds flowing to the bank and therefore on investments and stocks returns, And the need to focus commercial banks on the optimal choice between profitability and liquidity in order to achieve acceptable returns under the level of liquidity risk desired.https://alijtihed.univ-tam.dz/wp-content/uploads/2024/04/alijtihed-mag-035-art-013.pdfcommercial banksfinancial riskliquidity riskcredit risksolvency riskstock returns |
| spellingShingle | Alaa A. Abu Aleem Mohamed Zaoui Jum’a M. Abbad The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) مجلة الاجتهاد للدراسات القانونية والاقتصادية commercial banks financial risk liquidity risk credit risk solvency risk stock returns |
| title | The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) |
| title_full | The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) |
| title_fullStr | The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) |
| title_full_unstemmed | The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) |
| title_short | The impact of financial risk on stock returns in the Jordanian commercial banks during the period (2007-2016) |
| title_sort | impact of financial risk on stock returns in the jordanian commercial banks during the period 2007 2016 |
| topic | commercial banks financial risk liquidity risk credit risk solvency risk stock returns |
| url | https://alijtihed.univ-tam.dz/wp-content/uploads/2024/04/alijtihed-mag-035-art-013.pdf |
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