Cash flow volatility and leverage: Evidence from non-financial Jordanian companies
This study investigates the relationship between cash flow volatility and leverage in Jordanian firms. The research purpose is to investigate whether cash flow volatility affects a company’s capital structure in Jordan. Panel data analysis is used in this study for a sample of 72 shareholder non-fin...
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| Формат: | Статья |
| Язык: | English |
| Опубликовано: |
LLC "CPC "Business Perspectives"
2023-06-01
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| Серии: | Investment Management & Financial Innovations |
| Предметы: | |
| Online-ссылка: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18376/IMFI_2023_02_Shubita.pdf |
| _version_ | 1826910198986440704 |
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| author | Mohammad Fawzi Shubita |
| author_facet | Mohammad Fawzi Shubita |
| author_sort | Mohammad Fawzi Shubita |
| collection | DOAJ |
| description | This study investigates the relationship between cash flow volatility and leverage in Jordanian firms. The research purpose is to investigate whether cash flow volatility affects a company’s capital structure in Jordan. Panel data analysis is used in this study for a sample of 72 shareholder non-financial companies in Jordan from 2009 to 2020. The findings show that cash flow volatility has a significant link with leverage, indicating that companies with higher cash flow volatility tend to use more debt financing. In addition, the study finds that firm size, return on assets, and tangibility are positively associated with leverage, while growth is not significantly related. The study suggests that firms in Jordan should take cash flow volatility in consideration when making capital structure decisions.
The study provides evidence that cash flow volatility is a vital determinant of leverage in Jordanian companies. The findings suggest that managers should consider the cash flow volatility effect on the capital structure alternatives of their firms.
AcknowledgmentI want to thank Amman Arab University for its support. |
| first_indexed | 2024-03-13T03:14:24Z |
| format | Article |
| id | doaj.art-cab6b25f4818442688d10e433971eec2 |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T09:56:21Z |
| publishDate | 2023-06-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-cab6b25f4818442688d10e433971eec22025-01-02T05:36:56ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582023-06-0120228629410.21511/imfi.20(2).2023.2418376Cash flow volatility and leverage: Evidence from non-financial Jordanian companiesMohammad Fawzi Shubita0https://orcid.org/0000-0001-7389-2108Ph.D., Professor, Amman Arab UniversityThis study investigates the relationship between cash flow volatility and leverage in Jordanian firms. The research purpose is to investigate whether cash flow volatility affects a company’s capital structure in Jordan. Panel data analysis is used in this study for a sample of 72 shareholder non-financial companies in Jordan from 2009 to 2020. The findings show that cash flow volatility has a significant link with leverage, indicating that companies with higher cash flow volatility tend to use more debt financing. In addition, the study finds that firm size, return on assets, and tangibility are positively associated with leverage, while growth is not significantly related. The study suggests that firms in Jordan should take cash flow volatility in consideration when making capital structure decisions. The study provides evidence that cash flow volatility is a vital determinant of leverage in Jordanian companies. The findings suggest that managers should consider the cash flow volatility effect on the capital structure alternatives of their firms. AcknowledgmentI want to thank Amman Arab University for its support.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18376/IMFI_2023_02_Shubita.pdfcash flow volatilityfinancial performanceJordanian firmsleveragepanel data |
| spellingShingle | Mohammad Fawzi Shubita Cash flow volatility and leverage: Evidence from non-financial Jordanian companies Investment Management & Financial Innovations cash flow volatility financial performance Jordanian firms leverage panel data |
| title | Cash flow volatility and leverage: Evidence from non-financial Jordanian companies |
| title_full | Cash flow volatility and leverage: Evidence from non-financial Jordanian companies |
| title_fullStr | Cash flow volatility and leverage: Evidence from non-financial Jordanian companies |
| title_full_unstemmed | Cash flow volatility and leverage: Evidence from non-financial Jordanian companies |
| title_short | Cash flow volatility and leverage: Evidence from non-financial Jordanian companies |
| title_sort | cash flow volatility and leverage evidence from non financial jordanian companies |
| topic | cash flow volatility financial performance Jordanian firms leverage panel data |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/18376/IMFI_2023_02_Shubita.pdf |
| work_keys_str_mv | AT mohammadfawzishubita cashflowvolatilityandleverageevidencefromnonfinancialjordaniancompanies |