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

Abstract

The Impact of Disclosure of the Financial Statements at the Level of Information Asymmetry between Investors: An Empirical Study on the Commercial Banks in Jordan

Author(s): Sa'ad Al-Sakini

The aim of this study is to determine the impact of periodic disclosure of financial statements of commercial banks of Jordan listed in Amman Stock Exchange (ASE) on the level of information asymmetry between investors in the bank’s shares during 2016-2017. The study is based on a sample of all (13) Jordanian commercial banks listed on ASE. The stud used the daily trading data for these banks for the years 2016 and 2017. The study used three independent variables include periodic disclosure, trading volume and market value per share. While the dependent variable includes asymmetric information calculated by the daily difference between best purchase order and best offer for sale the share divided by the average daily rate. The results of the statistical analysis of the study variables found a negative, with statistically significant, impact of the periodic disclosure of the financial statements of Jordanian commercial banks on the level of information asymmetry between investors in banks' shares. The results also showed a negative and significant effect of the trading volume on the level of information asymmetry, while the market value per share has a positive and significant effect on the information asymmetry. The study emphasizes the importance of periodic disclosures and their direct effects on reducing the level of information asymmetry between investors and in raising the financial market efficiency. It recommends policy makers and financial market authorities in Jordan to introduce more frequent disclosure regime, which help investor to get more timely information, and thus reducing information asymmetry.