Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

Does the Global Financial Crisis and Merger Impact on Conservatism and Performance? A Study in the Jordanian Banks Context

Author(s): Yusuf Ali Al-Hroot, Mohammad Saadat Amireh

This paper investigates the impact of the financial crisis on conservatism and performance for Jordanian merged banks. For the case of this study sample observations from the financial ratios of the AHLI bank in Jordan and incorporated cross-sectional data, while the period from 2001 to 2011 represents a range of years characterized by time series data. The Pooled Data Regression (PDR) is the appropriate model for measuring and linking the cross-sectional data and the time series data and the research method of multiple linear regressions has been used. The AHLI bank comparison in the merger performances were observed to have improved in the post-merger and during the global crisis period in Efficiency, Leverage, and Cash flow ratios, while deteriorating in the post-merger and during the global crisis period in terms of Liquidity ratios. On the other hand, the AHLI bank reports a higher level of conservativeness during the global crisis compared with the pre-crisis period where the adjusted R2 of the model is equal to 25.64% for the period (2006-2011) compared to 16.33% for the period (2001-2004). The study recommended that the role of the private sector should be activated in maintaining accounting standards in Jordan by adopting more conservative policies.

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