This study investigated the applicability of corporate failure models to Jordanian manufacturing ... more This study investigated the applicability of corporate failure models to Jordanian manufacturing firms publicly traded on the Amman Stock Exchange during (2005-2012). Altman and Kida models are applied to a matched pair sample of 19 failed and 19 healthy firms. The findings showed that Altman and Kida models are suitable for predicting corporate failure in emerging economies like Jordan. Furthermore, both models work well with recent data. However, Altman model outperforms Kida model in terms of predictive accuracy and type I error produced. This suggests for stakeholders who are interested in early warning systems, that Altman model can be used for predicting potential problems since it considers solvency indicators. However, the model should be used along with nonfinancial models and proxies that reflect the firm's operating environment.
This study aims at investigating graphical reporting practices in the annual reports of Jordanian... more This study aims at investigating graphical reporting practices in the annual reports of Jordanian banks. Data are collected from the annual reports of 15 banks listed on Amman Stock Exchange for the period 2008-2013. The study revealed that graphs are being moderately used by Jordanian banks to present information in their annual reports. The presence of non-executive directors on the boards of Jordanian banks tend to limit graph usage in their annual reports. In addition, the study provides clear evidence for the presence of improperly designed graphs in the annual reports of Jordanian Banks. Thus, regulators in Jordan such as the Security Exchange Commission may need to develop a set of guiding principle for properly designed graphs. Furthermore, effort has to be devoted to encourage firms to comply with these principles.
Purpose – This paper investigates empirically the impact of corporate governance dimensions (Boar... more Purpose – This paper investigates empirically the impact of corporate governance dimensions (Board Size, Board Composition, Chief Executive Officer (CEO) Status, and Foreign Ownership) on the performance of Jordanian Banks. Design/ methodology/ approach -The study employs pooled data, and OLS estimation method to examine empirically the relationship between Jordanian banks' performance and corporate governance dimensions for 15 banks quoted on the ASE. Findings – The study reveals a positive relationship between corporate governance dimensions: the number of outside board members and foreign ownership and Jordanian banks' performance. Whereas, board size and the separation of the role of CEO and chairman have a negative relationship with performance. In addition, the study reveals that banks benefit from large size in offering services more than granting loans Research limitations/implications – This study is subject to some limitations. First, employing proxies for actual c...
This study examines the impact of board composition on the level of voluntary disclosure in the a... more This study examines the impact of board composition on the level of voluntary disclosure in the annual reports of listed Jordanian firms. Content analysis is used to collect the required data form the 2012-annual reports of 103 firms listed on the Amman Stock Exchange. Overall, the empirical evidence provided by the study is in line with the agency theory predictions. Furthermore, they have practical implications for firms and regulators in Jordan on the importance of the board of directors and voluntary disclosure as control mechanisms for mitigating the effect of the information asymmetries and agency problems. The study shows a moderate level of voluntary disclosure in the annual reports of Jordanian firms. However, insurance firms tend to disclose more voluntary information than industrial and services firms. Also, the results suggest that Jordanian firms with a high-level of board ownership concentration tend to keep the level of voluntary disclosure low. On the other hand, the presence of foreign directors on the board seems to influence, positively, the level of voluntary disclosure in Jordanian firms. Likewise, the proportion of the old directors on the boards in Jordanian firms is very high and is significantly associated with a higher level of voluntary disclosure.
International Journal of Quality & Reliability Management, 2011
PurposeThis paper aims to use empirical data to classify and contextualize the various practices ... more PurposeThis paper aims to use empirical data to classify and contextualize the various practices of quality costing.Design/methodology/approachThe paper uses 23 “best practices” of quality costing extracted from the literature to survey quality managers of 88 publicly listed Jordanian manufacturing firms. Exploratory factor analysis is then used to create an empirical taxonomic framework.FindingsFactor analysis of the data identifies a six‐factor structure of the practices of quality costing (PQC). Inspection of the component items shows the factors to be conceptually meaningful with none of them containing conflicting items. All factors are reliable and valid and have statistically sound structures.Research limitations/implicationsThe classification provided can help managers to better visualize, understand and implement the concept of quality costing. It provides a framework within which practices can be structured and evaluated; managers can identify areas in their firms that are...
This study aims to investigate free cash flow hypothesis proposed by Jensen (1986). Data pertaini... more This study aims to investigate free cash flow hypothesis proposed by Jensen (1986). Data pertaining to 102 non-financial firms listed on ASE during the period of 1998-2009 are analyzed using pooled and panel data methods. Contrary to Jensen (1986) proposition, we found that debt and dividend are not substitute techniques for mitigating agency costs of free cash flow in the Jordanian capital market, rather, they are complementary to each other. However, debt is used more than dividend for stability consideration of dividend policy where the use of debt and dividend is largely affected by dividend smoothing and leverage target adjustment considerations. Moreover, we found that low growth firms use debt more than dividends.
A Comparative Analysis of the Use of Graph Disclosure in the Firms` Annual Reports in Emerging Ma... more A Comparative Analysis of the Use of Graph Disclosure in the Firms` Annual Reports in Emerging Markets : The Case of Arabian Banks، للحصول على النص الكامل يرجى زيارة مكتبة الحسين بن طلال في جامعة اليرموك او زيارة موقعها الالكتروني
The study aims at investigating the financial behavior of Jordanian firms by using the asymmetric... more The study aims at investigating the financial behavior of Jordanian firms by using the asymmetric dynamic model of the Pecking Order Theory between 2000 and 2016. This research is based on a panel data of 952 observations from a sample of 56 industrial firms from Amman Stock Exchange (ASE). Estimating the static symmetric model and using the random effect model, the study ddoes not find any support for the implementation of the pecking order theory by Jordanian firms except for well-established firms, where the financing deficit coefficient is statistically significant and equal to one. Furthermore, the results indicate that the financial decisions of some Jordanian firms are affected by free cash flow agency costs while other decisions are affected by the bankruptcy risk. This confirms the severeobstacles of the capital market in Jordan and their direct impact on the financial decisions of the Jordanian firms. Therefore, the study recommends the effective implementation of the principle of transparency and the development of legislation to ensure effective control of the market and protection of investors.
This study investigated the applicability of corporate failure models to Jordanian manufacturing ... more This study investigated the applicability of corporate failure models to Jordanian manufacturing firms publicly traded on the Amman Stock Exchange during (2005-2012). Altman and Kida models are applied to a matched pair sample of 19 failed and 19 healthy firms. The findings showed that Altman and Kida models are suitable for predicting corporate failure in emerging economies like Jordan. Furthermore, both models work well with recent data. However, Altman model outperforms Kida model in terms of predictive accuracy and type I error produced. This suggests for stakeholders who are interested in early warning systems, that Altman model can be used for predicting potential problems since it considers solvency indicators. However, the model should be used along with nonfinancial models and proxies that reflect the firm's operating environment.
This study aims at investigating graphical reporting practices in the annual reports of Jordanian... more This study aims at investigating graphical reporting practices in the annual reports of Jordanian banks. Data are collected from the annual reports of 15 banks listed on Amman Stock Exchange for the period 2008-2013. The study revealed that graphs are being moderately used by Jordanian banks to present information in their annual reports. The presence of non-executive directors on the boards of Jordanian banks tend to limit graph usage in their annual reports. In addition, the study provides clear evidence for the presence of improperly designed graphs in the annual reports of Jordanian Banks. Thus, regulators in Jordan such as the Security Exchange Commission may need to develop a set of guiding principle for properly designed graphs. Furthermore, effort has to be devoted to encourage firms to comply with these principles.
Purpose – This paper investigates empirically the impact of corporate governance dimensions (Boar... more Purpose – This paper investigates empirically the impact of corporate governance dimensions (Board Size, Board Composition, Chief Executive Officer (CEO) Status, and Foreign Ownership) on the performance of Jordanian Banks. Design/ methodology/ approach -The study employs pooled data, and OLS estimation method to examine empirically the relationship between Jordanian banks' performance and corporate governance dimensions for 15 banks quoted on the ASE. Findings – The study reveals a positive relationship between corporate governance dimensions: the number of outside board members and foreign ownership and Jordanian banks' performance. Whereas, board size and the separation of the role of CEO and chairman have a negative relationship with performance. In addition, the study reveals that banks benefit from large size in offering services more than granting loans Research limitations/implications – This study is subject to some limitations. First, employing proxies for actual c...
This study examines the impact of board composition on the level of voluntary disclosure in the a... more This study examines the impact of board composition on the level of voluntary disclosure in the annual reports of listed Jordanian firms. Content analysis is used to collect the required data form the 2012-annual reports of 103 firms listed on the Amman Stock Exchange. Overall, the empirical evidence provided by the study is in line with the agency theory predictions. Furthermore, they have practical implications for firms and regulators in Jordan on the importance of the board of directors and voluntary disclosure as control mechanisms for mitigating the effect of the information asymmetries and agency problems. The study shows a moderate level of voluntary disclosure in the annual reports of Jordanian firms. However, insurance firms tend to disclose more voluntary information than industrial and services firms. Also, the results suggest that Jordanian firms with a high-level of board ownership concentration tend to keep the level of voluntary disclosure low. On the other hand, the presence of foreign directors on the board seems to influence, positively, the level of voluntary disclosure in Jordanian firms. Likewise, the proportion of the old directors on the boards in Jordanian firms is very high and is significantly associated with a higher level of voluntary disclosure.
International Journal of Quality & Reliability Management, 2011
PurposeThis paper aims to use empirical data to classify and contextualize the various practices ... more PurposeThis paper aims to use empirical data to classify and contextualize the various practices of quality costing.Design/methodology/approachThe paper uses 23 “best practices” of quality costing extracted from the literature to survey quality managers of 88 publicly listed Jordanian manufacturing firms. Exploratory factor analysis is then used to create an empirical taxonomic framework.FindingsFactor analysis of the data identifies a six‐factor structure of the practices of quality costing (PQC). Inspection of the component items shows the factors to be conceptually meaningful with none of them containing conflicting items. All factors are reliable and valid and have statistically sound structures.Research limitations/implicationsThe classification provided can help managers to better visualize, understand and implement the concept of quality costing. It provides a framework within which practices can be structured and evaluated; managers can identify areas in their firms that are...
This study aims to investigate free cash flow hypothesis proposed by Jensen (1986). Data pertaini... more This study aims to investigate free cash flow hypothesis proposed by Jensen (1986). Data pertaining to 102 non-financial firms listed on ASE during the period of 1998-2009 are analyzed using pooled and panel data methods. Contrary to Jensen (1986) proposition, we found that debt and dividend are not substitute techniques for mitigating agency costs of free cash flow in the Jordanian capital market, rather, they are complementary to each other. However, debt is used more than dividend for stability consideration of dividend policy where the use of debt and dividend is largely affected by dividend smoothing and leverage target adjustment considerations. Moreover, we found that low growth firms use debt more than dividends.
A Comparative Analysis of the Use of Graph Disclosure in the Firms` Annual Reports in Emerging Ma... more A Comparative Analysis of the Use of Graph Disclosure in the Firms` Annual Reports in Emerging Markets : The Case of Arabian Banks، للحصول على النص الكامل يرجى زيارة مكتبة الحسين بن طلال في جامعة اليرموك او زيارة موقعها الالكتروني
The study aims at investigating the financial behavior of Jordanian firms by using the asymmetric... more The study aims at investigating the financial behavior of Jordanian firms by using the asymmetric dynamic model of the Pecking Order Theory between 2000 and 2016. This research is based on a panel data of 952 observations from a sample of 56 industrial firms from Amman Stock Exchange (ASE). Estimating the static symmetric model and using the random effect model, the study ddoes not find any support for the implementation of the pecking order theory by Jordanian firms except for well-established firms, where the financing deficit coefficient is statistically significant and equal to one. Furthermore, the results indicate that the financial decisions of some Jordanian firms are affected by free cash flow agency costs while other decisions are affected by the bankruptcy risk. This confirms the severeobstacles of the capital market in Jordan and their direct impact on the financial decisions of the Jordanian firms. Therefore, the study recommends the effective implementation of the principle of transparency and the development of legislation to ensure effective control of the market and protection of investors.
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Papers by Iaad Sartawi