Financial Performance as Mediator on the Impact of Investment and Financial Decisions on Stock Price and Future Profit: The Case of the Jordanian Financial Sector

The current study investigates the effect of investment and financial decisions on stock prices and future profits in the presence of financial performance as an intermediate variable. Thus, the case of the Jordanian banking and insurance sector is analysed. The sample includes 13 banks and 10 insurance companies from 2009 to 2018. A structural equation modeling analysis is conducted using the AMOS 23 software to test the hypotheses and validate the model. Financial decision exhibits no effect on future profits and stock prices, whereas investment decision affects future profits and stock prices. Financial performance is considered a mediator in the effect between financing decision and future profits. By contrast, financial performance fails to mediate the impact of financial decision and stock prices. In addition, it cannot mediate the effect of investment decision on future profits and stock prices. Keywords: Investment Decision, Financial Decision, Financial performance, Stock Price, Future Profit JEL Classifications: G1, G2, G11 DOI: https://doi.org/10.32479/ijefi.952

Islamic Investment Financing and Commercial Banks Facilities: Mediation Effect of the Islamic Bank Size

Purpose: The objective of this study was to investigate the effect of Islamic financing on commercial banks’ credit facilities tested under the mediation of the two variables of Islamic bank size (Total asset and Investment deposit). Theoretical Framework: Even though studies of Islamic banking funding have been done within the Islamic economics and finance context, there has been needed to explore the effect of mediating the size of the Islamic bank and the relationship between Islamic financing and commercial banks’ credit facilities. Design/Methodology/Approach: We used the methodologies of Baron and Kenny (1986) and Preacher and Hayes (2008) to test a mediation effect of the Islamic bank size variable. Regarding the testing and validity of the hypothetical research model, path analysis was used within the structural equation modeling analysis. The study sample consists of 16 commercial and Islamic banks in the Jordanian banking sector, it is comprehensive of all listed banks' data in the Amman stock exchange, to the possibility of fairly generalizing the results to the community. Finding: Results indicate that the two variables of size indicators may partially mediate the direct effect of Islamic financing on commercial banks’ credit facilities. Such an effect is statistically significant. The findings provide practical solutions to enhancing competition in the Jordanian commercial and Islamic banking services market through various Islamic financing services to maintain and sustain banking resources. Research, Practical & Social implications: Future studies can consider other indicators of Islamic bank size and assess their influence on the various dimensions of the relationship between Islamic funding methodology and commercial bank facilities Implications/Originality/Value:  This study contributes to the literature on Islamic banking by analyzing the results of the effect of Islamic investment financing formulas on the commercial credit market in Jordanian banking, and it offers a practical and applied perception of the role played of the Islamic banking methodology in the Jordanian commercial credit market. &nbsp

Improving Working Capital Solvency of Islamic Banks Under Macroeconomic Variables

Purpose: The aim of this paper examines the impact of macroeconomic variables: public debt growth, inflation, money supply, balance of payments, and unemployment rate on the solvency of the working capital of Islamic banks in Jordan.   Theoretical framework: The financial ratio index is used by Alhayali and Albutma (1996) to compare total Assets to equity and assess whether the owners have enough rights to keep investing in fixed assets. we couldn't determine the type of relationship of macroeconomic factors on capital solvency.   Design/Methodology/Approach:  The study analyzed multiple linear regression data of economic variables and performance data in Islamic banks during the period 2005-2021.   Findings: The findings demonstrated that economic parameters, with the exception of money supply, are negatively correlated with the solvency of working capital (return on assets, return on deposits, and capital adequacy ratio). And the balance of payments has a positive effect.   Research, practical & social implications: The researcher suggested that the government should reduce the growth rates of public debt, inflation, and unemployment rate, Increasing the balance of payments and the money supply through the establishment of projects that are characterized by labor, and are financed through Islamic banks.   Originality/Value: The improvement of working capital comes as a result of an increase in projects, which in turn will lead to an increase in employment, cash flow, an improvement in exports, and the balance of payments, a decrease in unemployment, and inflation, and thus an improvement in the capacity of working capital

FinTech and financial inclusion: the mediating role of digital marketing

This study aims to test the role of digital marketing as a mediating variable in the relationship between financial technology and financial inclusion. The researcher applied the descriptive analytical approach to the data collected by developing a questionnaire distributed to 375 employees in the Jordanian banking sector. The researcher also used structural equation modeling to test the study hypotheses through SmartPLS software 3. One of the study’s most important findings is that digital marketing partially mediates the relationship between financial technology and financial inclusion. The study recommends that the Jordanian commercial banking sector should use advanced strategies that enhance technological innovation and digital marketing through the existence of an evolved environment for financial technology that is optimally exploited

Effect of interest rate risk on financial performance the mediating role of banking security degree: evidence from the financial sector in Jordan

The current study aims to determine the effect of interest rate risk on financial performance through the banking security degree as a mediating variable. The study population includes 13 Jordanian commercial banks from 2011 to 2018. To achieve the current study objectives, a descriptive and analytical approaches were used. Furthermore, Baron and Kenny’s test (1986) were adopted to examine the current study hypotheses. The results found that the banking security degree partially affects the relationship between interest rate risk and financial performance. Accordingly, this study provides a set of recommendations. Among them, we encourage policymakers and bank owners, and managers to develop efficient interest rate risk policies continuously in addition to strengthening the monetary and financial policies of the banking sector. They should strive to achieve a balance between each of the risks of interest rate, performance, and banking security degree