Open AccessInternal Liquidity Determinants Analysis of Commercial Banking Industry of Jordan
Author(s) -
Mohammed Ibrahim Sultan Obeidat
Publication year - 2022
Publication title -
wseas transactions on environment and development
Language(s) - English
Resource type - Journals
eISSN - 2224-3496
pISSN - 1790-5079
DOI - 10.37394/232015.2022.18.38
Subject(s) - market liquidity , profitability index , descriptive statistics , leverage (statistics) , business , capital adequacy ratio , stock exchange , financial ratio , regression analysis , financial system , credit risk , economics , actuarial science , statistics , finance , mathematics , incentive , microeconomics
The study aims to determine the possible internal factors affecting the liquidity position of the commercial banking industry of Jordan. Several possible determinants are taken into account in the study including, profitability, credit growth rate, customer deposits, financial leverage, capital adequacy, and bank size. The secondary data covering the period 2008-2019, of 13 out of 15 listed banks at Amman Stock Exchange, is gathered and analyzed. In total, 1,092 observations are employed in the analysis to achieve the goals of the study. All hypotheses are tested under 95 level of confidence, which means 5 percent coefficient of significance. Descriptive statistics including the mean, standard deviation, and the minimum and maximum values, in addition to correlations, are employed in the analysis of data. Using correlation and regression methods in hypotheses testing, the study declares that profitability, capital adequacy, and bank size, each of which, has a significant positive impact on bank liquidity. In addition, the study finds that financial leverage and customer deposits have a negative significant effect on bank liquidity. Moreover, the study finds no significant impact of credit growth rate on bank liquidity.