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

Abstract

Factors Affecting the Corporate Performance: Panel Data Analysis for Listed Firms in Jordan

Author(s): Ali Matar, Mahmoud Al-Rdaydeh, Fadi Al-Shannag, Mohammad Odeh

This paper is dedicated to investigating the impact posed by macroeconomic factors and firm-specific factors towards corporate performance. Such a review have been made using a sample of Jordanian industrial and services firms during the duration between 2007 and 2016. The macroeconomic factors have been demonstrated using Gross Domestic Product (GDP), Inflation rate (INF) and Interest Rate (IR) respectively, whereas firm-specific factors have consisted of firm size, financial leverage, investment, liquidity and sales growth. Therefore, the resulting organisational performance can be evaluated via Return on Asset (ROA) and Market to Book Value (MBV). In reviewing the degree of relationship between the aforementioned factors towards corporate performance, panel data regression has been utilised. The subsequent outcomes have concluded that GDP and INF respectively are impactful towards corporate performance, whereas IR poses less effect. In contrast, only the accounting based measure ROA has been influenced by firm-specific factors. Hence, these findings have solidified the present knowledge regarding factors affecting the organisational performance of listed Jordanian firms. A strong grasp of such information will allow the implementation of strategies towards accomplishing and underpinning the economic growth.