Earnings and market ratio: Additional evidence from Jordanian banks

Q1 Social Sciences

Banks and Bank Systems Pub Date : 2023-07-10 DOI:10.21511/bbs.18(3).2023.02

Mohammad Fawzi Shubita

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引用次数: 0

Abstract

The primary objective of this study is to investigate the correlation between profitability and the banks market value, while controlling for bank size as indicated by total assets. Two main models are analyzed, namely the benchmark model and the main model, to estimate the impact of high and low profitability on market value. The sample for this study consists of Jordanian banks covering the period from 2010 to 2020. The study results reveal that banks with high profitability exhibit a higher market value compared to those with low profitability, underscoring the crucial role of profitability as a determinant of bank value. Furthermore, the study establishes a link between low and high ROE and market value, indicating that variations in ROE significantly affect market value. Moreover, the study demonstrates a positive link between earnings and market value, emphasizing the significance of bank earnings in influencing market value. Lastly, the study emphasizes the role of bank size in shaping the link between ROE and market value, highlighting the importance of considering bank size when examining the link between profitability and market value. AcknowledgmentI thank Amman Arab University for funding this research.

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收益和市场比率:来自约旦银行的额外证据

本研究的主要目的是调查盈利能力与银行市值之间的相关性，同时控制银行规模，如总资产所示。分析了两种主要模型，即基准模型和主模型，以估计高和低盈利能力对市值的影响。本研究的样本包括2010年至2020年期间的约旦银行。研究结果表明，与盈利能力较低的银行相比，盈利能力高的银行表现出更高的市场价值，强调了盈利能力作为银行价值决定因素的关键作用。此外，研究建立了低ROE和高ROE与市场价值之间的联系，表明ROE的变化对市场价值有显著影响。此外，研究还证明了盈利与市值之间存在正相关关系，强调了银行盈利对市值的影响意义。最后，该研究强调了银行规模在形成ROE与市场价值之间的联系方面的作用，强调了在检查盈利能力与市场价值之间的联系时考虑银行规模的重要性。感谢安曼阿拉伯大学为本研究提供资金。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Banks and Bank Systems Social Sciences-Law

CiteScore

2.60

自引率

0.00%

发文量

审稿时长

11 weeks

期刊介绍： The journal focuses on the results of scientific researches on monetary policy issues in different countries and regions all over the world. It also analyzes the activities of international financial organizations, central banks, and bank institutions. Key topics: -Monetary Policy in Different Countries and Regions; -Monetary and Payment Systems; -International Financial Organizations and Institutions; -Monetary Policy of Central Banks; -Organizational Structure, Functions and Activities of Central Banks; -State Policy and Regulation of Banking; -Bank Competitiveness; -Banks at the Financial Markets; -Bank Associations and Conglomerates; -International Payment Systems; -Investment Banking; -Financial Risks and Risk Management in Banks; -Capital and Ownership Structure, Bankruptcy and Liquidation, Mergers and Acquisitions of Banks; -Corporate Governance and Goodwill; -Personnel Management in Banks; -Econometric, Statistical Methods; Econometric Modeling of Bank Activities; -Bank Ratings.