Firm-specific, macroeconomic factors and stock price risk for Jordanian banks

  • Received May 27, 2021;
    Accepted September 9, 2021;
    Published October 4, 2021
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/bbs.16(3).2021.15
  • Article Info
    Volume 16 2021 , Issue #3, pp. 166-172
  • TO CITE АНОТАЦІЯ
  • Cited by
    2 articles
  • 333 Views
  • 161 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Internal (firm-specific) and external (macroeconomic) determinants of stock price fluctuations are vital for investors seeking to invest their money in a firm’s stocks. Thus, the main aim of this study is to explore macroeconomic and firm-specific factors that influence stock price fluctuations for all conventional banks in Jordan in 2010–2019. Ordinary least squares multiple regression (panel data) is applied for data analysis. The results report that trading volume (TV), dividend yield (DY), and Gross Domestic Product (GDP) have a positive effect on stock price volatility, while stock price volatility is statistically negatively affected by return on assets (ROA), dividend payout ratio (DPR), and price-earnings ratio (PE). On the other hand, money supply (MS) does not affect stock price volatility. Paying more dividends can reduce stock risk and, in turn, reduce stock price volatility. The findings can benefit current and potential investors, firm managers, brokers, dealers, portfolio managers, regulatory bodies, policy makers, and researchers.

view full abstract hide full abstract
    • Table 1. Variable measurement
    • Table 2. Summary statistics
    • Table 3. Multicollinearity
    • Table 4. Hausman test results
    • Table 5. Random effect regression results
    • Conceptualization
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Data curation
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Formal Analysis
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Funding acquisition
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Investigation
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Methodology
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Project administration
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Resources
      Wasfi Al Salamat, Mohammad Q. M. Momani
    • Software
      Wasfi Al Salamat
    • Supervision
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Validation
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Visualization
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Writing – original draft
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh
    • Writing – review & editing
      Wasfi Al Salamat, Mohammad Q. M. Momani, Khaled Batayneh