Impact of Financial Leverage, Size and Assets Structure on Firm Value: Evidence from Industrial Sector, Jordan
Влияние финансового рычага, размера и структуры активов на стоимость фирмы: данные промышленного сектора Иордании
2019-12-10
SCID: 54.1/kg3qywxk
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Abstract (AI)
The present study aims at revealing the financial leverage, Size, and asset structure and its impact on the values of firms. The researcher used the analytical method approach for a sample of 13 firms from the mining and extraction industry sector listed on the Amman stock exchange of the period 2010-2018.The model of simple line regression was used for testing the hypotheses of the study by using both programs of (E-views, STATA) in addition to both programs of unit root test and variance inflation factor to make sure of the data stability and no relationship between variables. The study concluded the non-existence of the impact of financial leverage on the firm value and the relationship between the financial leverage and Tobin’s q scale was negative. However, there was an impact of each size and asset structure on firm value and the relationship between the natural logarithm of size and asset structure was positive with Tobin’s q. The study recommends that Companies must achieve an optimal mixture of debt and equity, for long-term survival and hence the growth of the company.
Key Findings
1
Asset structure significantly affected firm value and was positively related to Tobin’s Q.
2
Financial leverage had no statistically significant impact on firm value, although its relationship with Tobin’s Q was negative.
3
Firm size significantly affected firm value, with the natural logarithm of size positively related to Tobin’s Q.
4
The study analyzes 13 Jordanian mining and extraction firms listed on the Amman Stock Exchange from 2010–2018.
5
The study recommends that companies pursue an optimal debt–equity mix to support long-term survival and growth.
Research Object
Firms in Jordan’s mining and extraction industry sector listed on the Amman Stock Exchange
Research Subject
The effects of financial leverage, firm size, and asset structure on firm value, including their relationships with Tobin’s q
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2019-12-10
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