The Impact of Voluntary Disclosure on Stock Liquidity in Jordanian

Commercial Banks Listed on Amman Stock Exchange

(Empirical Study)

By

Mo’ath Mahmood Al Abbadi

Supervisor

Dr. Husni K.Al-Shattarat

This Thesis was Submitted in a Partial Fulfillment of the Requirements for Master’s

Degree in Accounting

Faculty of Graduate Studies

Zarqa University

Jan.2017

78

Zarqa University

Authorization Form

I Mo’ath AL Abbadi, authorize Zarqa University to supply copies of

Thesis/Dissertation to libraries or establishments or individuals on request,

according to the University of Jordan regulations.

Signature:

Date: / / 2017

iii

Dedication

My humble effort I dedicate to my father & mother whose affection, love,

encouragement and prayers, day and night, make me able to get such a success

and honor

Fatima, for her continuous support, encouragement, patience and attention

helped me to complete my study.

And To my whole family and friends

iv

Acknowledgements

I thank Almighty Allah Whose help has enabled me to complete this thesis.

I express my deep thanks to my supervisor Dr. Husni Khalil Al-Shattarat for

his support, guidance, comments and valuable advices to complete this theses.

I would like to express my gratitude to everyone who supported me to make

this work possible and special appreciation to my family, my brother, Fatima,

Mahmud Na’ura, Muna Jaradat and my friends

Last, but not least, special thanks to the members of the examination

committee for their comments and suggestions that improve the quality of this

work.

Mo’ath AL Abbadi

Jan 2017

v

Table of Contents Committee Decision..................................................................................... ii

Dediction...................................................................................................... iii

Acknowledgement........................................................................................ iv

Table of Contents.......................................................................................... v

List of Tables................................................................................................ vi

List of Abbreviations.................................................................................... vii

Abstract......................................................................................................... viii

Chapter 1

1.1 Introduction............................................................................... 2

1.2 The Problem of Study............................................................... 3

1.3 The Purpose of the Study.......................................................... 4

1.4 Significance of the Study.......................................................... 4

1.5 Research Hypotheses................................................................ 5

Chapter 2

2.1 Theoretical Framework............................................................. 7

2.2 Literature Review..................................................................... 22

2.3 Summary of Literature Review................................................ 28

Chapter 3

3.1 Population................................................................................. 33

3.2 Sample....................................................................................... 33

3.3 Data sources.............................................................................. 34

3.4 Variables and Measurements.................................................... 34

3.5 Statistical Techniques Used...................................................... 35

Chapter 4

4.1 Descriptive Statistics................................................................. 39

4.2 Multicollinearity Test for the OLS Regression......................... 43

4.3 Correlation Statistics................................................................. 44

4.4 Hypotheses Testing and Results Discussions........................... 46

Chapter 5

5.1 Conclusions……………………………………………….…... 52

5.2 Recommendations…….………………………………….…… 53

References…………………………………………………………. 54

Abstract (Arabic).................................……………………….......... 58

Appendix............................................................................................ 59

vi

List of Tables

No.

Table Caption

Page

Table 1

Descriptive Statistics for Study Variables

40

Table 2

Mean Values of Voluntary Disclosure

42

Table 3

Correlation between Explanatory Variables

43

Table 4

Collinearity Statistics Results

44

Table 5

Correlation between Study Variables

45

Table 6

OLS Regression Results for Study Hypothesis

46

Table 7

OLS regression Result for HO1

47

Table 8

OLS Regression Result for HO2

47

Table 9

OLS Regression Result for HO3

48

Table 10

OLS Regression Result for HO4

49

Table 11

Summary of Study Hypothesis Testing

50

vii

List of Abbreviations

Abbreviations

ASE Amman Stock Exchange

AL Assets Liquidity

BS Bank Size

EPS Earnings Per Share

FASB Financial Accounting Standards Board

IFRS International Financial Reporting Standard

LI Stock Liquidity

P Profitability

QR Quick Ratio

ROA Return on Asset

TO Stock Turnover

VD Voluntary Disclosure

viii

The Impact of Voluntary Disclosure on Stock Liquidity in

Jordanian Commercial Banks Listed on Amman Stock Exchange

(Empirical Study)

By

Mo’ath Mahmood Al Abbadi

Supervisor

Dr. Husni K.Al-Shattarat

ABSTRACT

This study investigates the impact of voluntary disclosure on stock liquidity in

Jordanian commercial banks listed on ASE during 2006-2014, While the empirical evidence

of testing the impact of voluntary disclosure on stock liquidity is limited to Jordanian market

, 13 banks were studied as the research sample with 117 observations taking into control

variable (Size, profitability and asset liquidity ) of bank ,Voluntary disclosure was

determined by 33 indicators which have also been used in previous studies. Research

hypotheses have been analyzed using (Ordinary least square) regression to test the impact of

voluntary disclosure on stock liquidity, which was measured by using Turnover of shares.

The results indicate that Jordanian commercial banks with more voluntary disclosure leads

to increasing shares liquidity of banks and attracting for investors in taking investment

decisions and that investors are overly responding to disclosed information.

Finally, the researcher recommends that the current empirical study contributes to that

investigation in the context of banking and provides new insight into the determinants of

voluntary disclosure in the annual reports of the Jordanian banks as an indicator of the

Jordanian commercial banks stock liquidity.

Keywords: Voluntary disclosure, Stock liquidity, Jordanian Commercial banks

1

Chapter 1: General Framework

1.1 Introduction

1.2 Problem of the Study

1.3 Objective of the Study

1.4 Significance of the Study

1.5 Research Hypotheses

2

1.1 Introduction:

Recently, the indicator and sensitivity of stock price in the financial market to order

flow is the liquid of stocks which is central to the efficient functioning of trade in the

financial markets, and is in part determined by information asymmetry among traders in the

market, whereas stock liquidity is one of the most important issues affecting the investment

decisions and represents the signals of stock price and trading in the market that could be

useful for investors, the scholars latterly started looking at banks stock liquidity in markets

and progressively recognized that stock liquidity may be affected by the voluntary

disclosure that may use as instruments to predict stock liquidity ratio which is affecting the

investors return (Schoenfeld, 2015).

Over the past decade, financial crisis which had a negative impact on shareholders

and market , voluntary information need has significantly increased since to restrict the

negative impact of crisis have to restore the shareholders confidence back and the concerns

of investors of the firms by providing additional financial and non-financial information

through annual report to disclose, that assists them in decision-making

(Kanapathippillai,2010) , additionally, stakeholders concerning of voluntary disclosure

which helps them to make the financial decisions when the information they needed are

available through obtaining the economic stability and quality of their investment through

financial and non-financial report that is provided by firms . The firm presents information

to stakeholders or to other interest parties by financial reports , while the performance and

potential of firms reflecting on voluntary disclosure quality (Mitton, 2002) and the

prediction of firm performance cannot be determined with low level of voluntary disclosure

(Chang, Cho, and Shin 2007).

3

Investors are looking at the banks performance from its financial statements that

provides useful information which could not give full indication without voluntary

disclosure which banks usually provide via annual report (Erlynda, 2015).

The researcher tends to test the impact of banks voluntary disclosure on stock liquidity

evidence of the link between bank stock liquidity and voluntary disclosure.

The study focuses on stock liquidity in market and performs the analysis while taking

into consideration the bank size, profitability, and assets liquidity. The need to control

variables to take place since the disclosures can also be related to the size, profitability, and

asset liquidity of the bank .Therefore, it is important to examine the link between bank stock

liquidity and disclosure that may potentially have relation. The study gives highlight on

stocks liquidity by providing evidence from Amman stock exchange.

1.2 Problem of the Study :

One of the reasons that confused investors of taking investment decision is the lack of

voluntary disclosure in the annual financial reports and could not provide full information

that reflect the performance of the bank to predict the stock price and trading rate in the

market, which affects investors returns, for that, it is for banks to respond to the interests of

the various parties to provide voluntary disclosures in the annual financial reports (Shehata,

2014).

Banks in Jordan attempt to satisfy investors need and seek to create new policies for

information included in the annual report (Kanapathippillai, 2010). The researcher confirms

that with exploring this problem and finding some patterns to explain this relationship will

participate in resolving the conflicts between banks and investors (Loukil and Yousfi 2012).

4

Several studies extended these issues in the developed countries, like Jordanian market, few

studies examined the impact of voluntary disclosure on stock liquidity.

This study is prepared to answer the following questions:

Q1.What is the impact of voluntary disclosure on stocks liquidity?

Q2.What is the impact of banks profitability on stocks liquidity?

Q3.What is the impact of banks size on stock liquidity?

Q4.What is the impact of banks asset liquidity on stocks liquidity?

1.3 The Objective of the Study:

The purposes of the study are as follows:

To examine the impact of voluntary disclosure on stock liquidity for Jordanian

commercial banks.

To identify the impact of bank size, profitability, and asset liquidity of stocks

liquidity.

To investigate the impact of voluntary information on the investor’s decision

making and trying to resolving the gap between banks and investors.

1.4 Significance of the study:

The significance of the study is to examine the impact of voluntary disclosure on

stock liquidity by measuring the banks size, profitability, and liquidity of banks assets

which listed on ASE during the period (2006-2014).

Banks information need to be reliable and relevant, expected from financial

statements on information disclosed in the annual report for useful decision making and the

study is developed to influence in investment decision by giving them a degree of stocks

liquidity and assisting in predicting the return.

5

The study trying to find and evaluate whether the commercial banks in Jordanian

listed on ASE contributes arises disclose information in their annual reports. It will helps

interested stockholders in their decision making by given level degree of what information

to disclose and importance information will helping the other parties .Investigate if there is

any significant relation between commercial banks feature (i.e. Size of bank, profitability of

bank, asset liquidity of bank) and the range of voluntary disclosure in the annual reports of

Jordanian commercial banks listed on ASE over 2006-2014 of the study.

1.5 Research Hypotheses:

In order to achieve the objective of the study after reviewing the literature of

accounting studies, the following hypotheses of the study are reformulated as follows:

HO1: There is no significant impact for bank's voluntary disclosure on bank stock liquidity

in Jordanian commercial banks listed on ASE.

Sub-hypotheses:

HO11: There is no significant impact for bank's profitability on bank stock liquidity in

Jordanian commercial banks listed on ASE.

HO12: There is no significant impact for bank's size on bank stock liquidity in Jordanian

commercial banks listed on ASE.

HO13: There is no significant impact for bank's assets liquidity on bank stock liquidity in

Jordanian commercial banks listed on ASE.

6

Definition of the Study Variables

Voluntary disclosure is defined as the options of management to provide accounting

information and other related to the users need for decision through annual reports (Choi

and Meek, 2011).

Stock Liquidity defined liquidity as the capacity of market to perceive the demand

flow of buying and selling of asset (Erlynda, 2015).

Profitability of bank has been determined as a control variable by measuring assets of

the firms, (ROA) included both debt and equity both are used to create a vision around

operations of the firm, for the investors ROA attempt to provide indicators the efficiency of

the firm management and its ability to convert the money it has to invest into net income.

As a result, the high ROA percentage is better where it describes the firm earning money on

less investment ROA indicates how much profit a firm is able to return to each dollar of

assets invested and provides indication how management’s performance and efficiency by

using assets to generate earnings , calculated by dividing a firm’s annual earnings by its

total assets as percentage and sometimes described as return on investment .Generally , it

provides what earnings returned from assets invested while for general firms ROA virtually

highly dependent on the industry and it prefers to compare against previous ROA number or

the same banks in the same industry) Hawashe ,2016).

Size of the bank has been determined as another control variable by measuring total

asset of banks with larger amount of assets that are capable to multiplicity of their

investments and less prone to bankruptcy (Heflin et al., 2001), larger size of firms gives

7

advantage by reducing the cost of information and has more information to disclose (Booth

et al., 2001).

Assets Liquidity of the bank has been determined as an additional control variable by

measuring quick ratio (QR) while the liquidity refers to the assets which can be quickly

converted into cash without loss occurs in value. The quick ratio gives indicator of the

current ratio by measuring the most liquid assets that can cover current liabilities and it is

more conservative than other ratios because it omits the effectiveness of inventory and other

current assets that are complex to turn into cash it’s better to be higher ratio which leads

more liquid stocks. (Pradhan and Shrestha, 2016)

8

Chapter 2: Theoretical Foundations & Literature

Review

2.1 Theoretical Framework

2.2 Literature Review

2.3 Summary of Literature Review

9

Preface

This chapter represents the theoretical issue for voluntary disclosure and stock

liquidity, literature review of study which is related with voluntary disclosures and stock

liquidity in the banks’ annual reports trying to develop the impact of voluntary disclosure on

stock liquidity.

2.1 Theoretical Foundations

This section included many studies attempted to test the level of voluntary disclosure

in the annual reports of banking sector in different countries. Over years numerous studies

reached that it’s important to provide full and fair financial information without removing

or hiding any information from investors as (Kashanipoor et al., 2009) argues.

Belkaoui (2000) argues the information which is useful for investors and does not

mislead the users. The study focuses on the impact of voluntary disclosures on stock

liquidity by discussing previous studies of stock liquidity.

2.1.1 Voluntary Disclosure

Voluntary disclosure is defined away of corporate management to provide accounting

information and other relating to the internal and external users need for decision through

corporate annual reports (Choi and Meek, 2011). The aim of providing additional

information for investors is to improve legitimacy of the information provided by bank and

give better indication of accounting practices used through annual reports. The international

financial reporting standard (IFRS) goal is to provide adequacy financial information to

investors and additional information to avoid misleading, argue find the high level of

information disclosed indicate the perfection of the relation between earnings and returns

(Erlynda ,2015)

10

Studies found that the disclosure of voluntary information reduces the asymmetry

information in the financial market and the highly communication firms decrease the

asymmetry of information that mislead analysts of earning expectation (La Bruslerie and

Gabtani, 2010). Other studies show that the managers seek to disclose voluntary

information of the firms performance for current and future. Recently, report refers to the

financial accounting Standards board (FASB) supports and encourages voluntary disclosure

of information that will improve utility from capital market and clarify the firms efficiency

to the investors by approbating some parties as auditing. Standards and accounting attempt

to restrict the manager’s ability to manipulate information that does not fit with the

shareholders interests .Disclosure regulations guarantee to obtain information timely and

completely to the shareholders.

Microeconomic theory supposes who makes a decision by selecting a substitution that

enhances his benefit ,where this proposition is used for the decision about what to disclose

or not ,management expected to disclose unless yields was highest return . No need that

management discloses additional information that occurs a good news while disclosing bad

news on time will be the optimal act, many evidences prove management trying to manage

earnings and decrease eventualities to avoid unfavorable earnings sudden and expatiation.

(Matsumoto, 2002).

Management suffers when making disclosure decision, how they react to stakeholders

with information disclosed. Like what happened in the case of disclosing earnings guidance

with uncertainty expected as to whether or not will be realized. Managers sense that their

expected earning is worse than earnings expectations by analysts, because the expected

earnings give a signal that the management has limited control over the firm whereas

11

providing reports, while management edited their expectations will be decreased rather than

increased revision (Graham et al., 2005).

Disclosure decision needs various procedures to select which item will be useful

Firstly, decide the detail level of item, case, when a firm signs with another party in a

press release firm making-decision whether or not to disclose financial details of deal,

additional case , management gives signal of the earnings forecast fluctuation weather lower

or upper.

Secondly, the degree of disclosure that links decisions of future disclosure may

fluctuate before the disclosure of any future information the investors had imagination about

policy of management disclosure, therefore, leads to create new imagination when

management provides additional information .For example, investors will predict future

conference schedules when the management discloses the conference scheduled previously.

In result of (Graham et al., 2005) argument, the managers marginalization to set the

disclosure that will be risky to follow up.

Thirdly, decide which way of linking the information to investors, some countries

seek to disclose the sensitive information to the public through channels that are available to

all, on it the sensitive information is better to disclose through annual reports. However,

under restriction management still coordinates secretly meetings and hides a sensitive

information.

Fourthly, time of disclosure that will lead to enhance firm value or Seize the chance to

turn shareholders wealth to themselves ,in case of , disclose the stocks information before

issuing , slowness good news and speed up of bad news before awards of stock option

(Graham et al., 2005).

12

Theories of Voluntary Disclosure

Explaining theories of voluntary discloser practices: agency theory, signaling theory,

capital need theory and legitimacy theory

Agency Theory:

Agency is defined as the contract between one or more persons (principals) with other

person (agent) provides service encompasses authorize some decisions to the agent, the

agents agree with principals; whereas principals agree with shareholders from firms

perspective, the observation costs are paid by the principals, and shareholders to restrict the

agents unacceptable activities (Brealey et al., 2012) .

Bonding costs are paid by the agents and principals to ensure that no risk of the

managers interests will be produced from their decisions, other remaining costs emit when

agents’ decisions swerve which leads to increasing managers interests, consequently, the

cost is the combination between controlling cost, bonding cost, and the remaining cost. The

agency, arrives to the information asymmetry conflict that managers have authorized of

information more than shareholders (Brealey et al., 2012). One of the mediations to

improve and help shareholders’ interests with managers to resolve the agency conflict is the

optimal contracts (Healy and Palepu, 2001), during managers’ disclose additional

information lowering the costs of agency and persuade users that managers are effective and

acting in an optimal way. In addition, the regulations reduce the agency conflict as

managers disclose additional and private information, where the shortage of disclosure leads

to create conflict between the managers and shareholders’ interests. (Al-Razeen and

Karbhari, 2004). The agency theory has been relied upon in this study to explain the impact

of voluntary disclosure.

13

Signaling Theory:

Signaling represents the information asymmetry in the market, although used to

clarify the reporting by voluntary disclosure in firms thus leads to information asymmetry

problem through firms show better than others in the market to encourage investments and

fame (Shehata, 2014).Voluntary disclosure notices that firms disclose additional

information than others to give indication that they are better. (Campbell et al., 2001)

Capital Need Theory:

Firms try to attract external finance to enhance their capital whether in debt or equity,

so capital need theory represents that voluntary disclosure in assistance with the firms need

to enhance their capital at low cost (Shehata, 2014). The financial accounting standards

board (FASB) reported that "increased capital resulted from increased voluntary

disclosure", therefore, the fact for investors that uncertainty of adequacy and accuracy of

information provided by firms ,as the relationship between disclosure and capital is positive

,when information disclosed is higher than the cost of capital will be lower .

Legitimacy Theory

This theory supposed that firms had no right to be unless they realize their values

matching with society at where exists, the main idea of legitimacy theory as contract

between firm and society (Magness, 2006), while the aim of accounting is providing useful

information that help users in decision- making and meet social needs. Since the theory is

based on society's realization, management is compelled to disclose information trying to

attract external users and change their opinion about its company (Cormier and Gordon,

2001) through annual report ,where it represents an important source of legitimacy

(Lightstone and Driscoll, 2008).

14

There are factors that affect the need for voluntary disclosure identified by (Healy and

Palepu, 2001), these factors are listed in six categories: capital markets transactions /

information asymmetry, corporate control contest, stock compensation, increased analyst

coverage, management talent signaling, and limitations of disclosure:

1. Capital markets transactions/ information asymmetry, managers try to issue new capital

by debt or equity. The investors expectation depends on information asymmetry between

managers and the investors need to be reduced thus decreasing the cost of capital by

external financing is must and voluntary disclosure information increased to investors while

reducing in information asymmetry (Shehata, 2014).

2. Corporate control contest is the potential of firms diminishing to increase voluntary

disclosure and reduce the potential that could occur through normal earnings and

performance of stock (Graham et al., 2005). Manager’s attempts to explain the main reason

for weak performance and weak potential of firm by increasing information disclosed in

order to keep control over the firm (Healy and Palepu, 2001).

3. Stock compensation, Managers compensation through shares which constitute incentive

to increase voluntary information (Graham et al., 2005). There are two reasons to determine

the stock consumption, firstly, managers trying to reduce costs related to construction that is

correlating with stocks for employees (Aboody and Kasznik, 2000).

Secondly, managers are concerned with their shares when traded it will encourage them to

disclose additional information to enhance their shares and to accurate any restrictions that

may influence award of their shares (Healy and Palepu, 2001).

15

4. Increased analyst coverage, the cost of information by analysts will be decreased when

increasing voluntary disclosure of information while the number of analysts as totally

increasing of information available to them (Shehata, 2014).

5. Management talent signaling when investors expectations are able to expect the change in

the firms economic environment and restraint to them the limitations of the firms market

value, thus brilliant managers disclose information about earning to promote their talent

(Shehata, 2014), and some managers try to limit information disclosures to avoid using this

information against them by regulators.

6. Limitations of mandatory disclosure, while Laws do not meet the need of information to

disclose by investors over mandatory disclosure because laws do not provide enough

quantity of information to help them in decision-making (Al-Razeen and Karbhari, 2004) so

the voluntary information to disclose must arise.

Sources of Voluntary Disclosures

The source of firm information could be obtained through a multiple sources such as

magazines, press reports, annual reports, and newspapers (Healy and Palepu, 2001) but in

most countries the annual reports is one of the most important sources for users and

shareholders when provided the primary and public source or information and more useful

than reports provided through other sources. The annual reports represent the only formal

source in many countries (Naser and Nuseibeh, 2003).

Moreover, scholars Praised that there is positive relation between annual reports and

other media that disclose information and available for information for firms in other ways.

Generally, all sources that provide useful and timely information to shareholders(Shehata,

16

2014), and the information provided in the annual reports have been divided into two

sections; the first part is financial information included statements, auditors reports, and

notes and the second part includes the rest of information (non-financial)(Naser and

Nuseibeh,2003), where it could be a source of financial analysis .The opponents of annual

reports attempt that reports use as advertisement and do not provide vision of the firm’s

future other than used for decision-making.

Types of voluntary disclosure regarding to what the company has decided to reveal we can

classify that information into one of the six categories: Business data, Management’s

analysis of business data, Forward-looking information, Information about management and

shareholders, Background about the company and Information about intangible assets.

1. Business data Voluntary disclosure of business data usually relates to publishing

internal operating data and performance measurements which are used by the

management to drive the business. It can be classified into few subcategories

depending on what the managers decide to publish. (Kolton et. al. 2001).

2. Management’s analysis of business data if the managers decide to disclose their

private analysis they usually should focus on explaining the circumstances for

changes in the operating and performance related data also focusing on the

identification of past effects and trends. Similarly, it consists of four subcategories.

(Kolton et. al. 2001).

3. Forward-looking information Regarding forward-looking information managers

usually collect data about future possible opportunities and upcoming risks, their

plans involving success factors and many comparisons with past performances, its

17

effects on the future and how the past future plans have been well predicted. (Kolton

et. al. 2001).

4. Information about management and shareholders detailed data about firm's directors,

management, biggest shareholders and relationships within the company could make

the stakeholders closer to the business and therefore be beneficial for its interest.

Despite the fact that this is a useful data most of this information is already required

in mandatory statements (Kolton et. al. 2001).

5. Background about the company making stakeholders know more about firm's

activity would bring positive effects on company's activity. Managers should share

broad objectives, mission and vision statements, strategies, its influence on the

industry etc. (Kolton et. al. 2001).

6. Information about intangible assets Management should put high effort into

explaining intangible assets of the company, especially because of the fact that

accounting standards usually do not recognize them. Mandatory information does

not take into account intangible aspects, and therefore the value of the company is

usually lower (Kolton et. al. 2001).

18

2.1.2 Stock Liquidity

Several definitions for stock liquidity are mentioned by different experts which led to

the difficulty of finding a specific definition, (Erlynda, 2015) defined liquidity as the

capacity of market to perceive the demand flow of buying and selling.

In contrast, (Shen and Starr , 2002) explained that liquidity had several dimensions not

only one dimension variable ,therefore, liquidity is Part and parcel in the development of

capital markets and there are several reasons for liquidity to be pillar in capital markets

including:

1-To be supportive in economic growth, capital market must be liquid.

2-Easier for investors to invest in risk and yield instruments in capital market (stocks and

bonds).

Nirwan Suparwan (2014) investigated several efforts that make a market more liquid:

1-Availability of tax incentives

2-Submitting rules of dual listing

3-Support by government, to make stock markets more liquid and attractive for investors

4-To maximize safety of the capital market

5-Expanding internal investor base

6-To increase level of liquidity of capital market by entering firms that are owned by state.

7-To create new functions as source of financing for businesses in their country.

19

Consistently to explain liquidity (Wyss, 2004) investigates and provides several

dimensional variables and the importance of that liquidity has four several aspects and

dimensions as follows:

1-Trading Time: perform a transaction instantly at the current price in market, the time

between trades or converse is the number of trades per time unit is the guide for trading

time.

2-Tightness: sell or buy asset at the same time and same price, the tightness presents the

way of the transacting and immediacy cost that measures tightness at the different

accessories of the extended

3-Depth: sell or buy specific amount of asset without any impact on the quoted price that

shows illiquidity appears for the investor when trading in market while depth can be

measured by flow ratio or order ratio.

4-Resiliency: sell or buy specific amount of asset with a slight impact on the quoted price.

The aspects of liquidity dose not used the same expression by other scholars whereas

capture the depth of the size of the spread / (breadth).

Stock liquidity could be measured by examining the firms internal factors affects the

liquidity as (norvaisiene and stankeviciene 2014) supposed that the liquidity may be

affected by firms internal factors, because there is a positive relationship between firm size

and stock liquidity .In conjunction with that, there is a positive relation affected by stock

liquidity with assets liquidity, therefore, found that positive impact leads increasingly to

growth potential by stock liquidity. Wyss (2004) found that liquidity must have different

ways to measure because it cannot be traced noticeably , supported that many conflicts

could occur while estimating the liquidity in market when using various measures , as

20

before, Wyss(2004)argues that liquidity has two faces one-dimensional and multi-

dimensional to measure liquidity in various variables .

Sarr and Lybek (2002): classified three categories of liquidity measurements:

1-Valume Based Measures:

The most beneficial way to measure breadth which is the presence of many and large

orders enormous with minimum transaction of price impact , the existence of trades are the

base of information for trans actors and dealers , the source of information from order flows

which the uncertainty in this order flow will delay the information about the quoted prices

,whereas the changing on prices arises and causes balance in order flows which face price

swings that is not justified fundamentals(resiliency). This way allows dealers to have

sustainability of information source, price swings whether are consistent or temporary, the

lack of breadth and depth in markets. In addition, nonexistence of the source of information

that is provided by numerous and frequent trades leads to price interruptions and

equilibrium prices, while selling and buying exist in the market, trans actors and dealers,

could be able of execution orders without any risky impact to inventory positions, while

potential of buyers and sellers can be identified easily by market makers .Trading volume ,

used to measure the presence of participants and transaction in the market and provide

meaning for assets volume by relating outstanding ,this measure comparative between the

value of transaction to price swings and the liquid markets were founded. The example of

volume-based measures is the turnover which is appositive relationship between stock

liquidity and stock turnover while calculated by ratio of shares traded to shares outstanding

as (Amihud, 2002). That gives an indicator of stock with higher turnover ratio the investors

fevered to convene stock with shorter time.

21

2. Price-Based Measures:

The price-based measurement depends on measuring resiliency by tracing the orders

movements across equilibrium price, introduced of the equilibrium price is an attitude in

which the supply equals the demand for stocks without shortage or surplus in the market

and the stability of price with no tendency to change.

When there is no information of verity of stock , measure of liquidity must be relevant

to measures of liquidity while new information trends to new equilibrium values,

unrepeated of liquidity measures more than kind of weighted average reversed the

fluctuation of new information of subtract stock compared with other , when there is need

for structural model to determine the equilibrium price but the determination is difficult , if

there is need new information impacting the price of an instrument (Abdourahmane and

Toony 2001). The price movements are persistent in the liquid markets significantly for

efficiency of the market although if new information simulates the equilibrium prices ,

Ekins and Barker (2001) augmented literature on carbon taxes and concluded that there is

agreement that market-based instruments of carbon observed giving emissions lowering at

lower cost than regulations .Sin and Kerr (2005) noted that price-based measures are

suitable for the treatment of pollutants in the long term such as carbon dioxide and it

provides more spatial and temporal flexibility , provides incentives to offset the marginal

cost of pollution control in all firms as the government needs marginal cost information for

all firms to make the suitable decisions ,price -based measures represent the high degree of

expected to operate. Measures must be selected with sustainable and flexible over time to

take into consideration change in contexts.

22

3-Transaction Cost Measures:

Heflin et al. (2001) represented and classified between implicit transaction costs and

transaction execution costs included the expenses related with , because bid-ask spreads

may contain all of these costs and it is the most commonly measure used ,bid-ask spreads

contains:

1- Order processing costs.

2- Asymmetric information costs.

3- Inventory carrying costs.

4- Oligopolistic market structure costs.

For instance, enhanced by the availability of dealers who are ready for buying and

selling financial instruments at the quoted bid-ask prices which serve carrying costs of

inventory that depend on the dealers in their positions at the end of day must recover their

order processing costs but also there is risk while they are ready to trade depending on

asymmetric information.

They must be prepared for any potential losses to the availability of market, costs are

smaller, unless a lot of participants are ready to trade with dealers in order to detect their

asymmetric information. Furthermore, the competition influencing the prices and some

dealers have power to estimate fees for immediacy.

Through this measurement it can be obtained on the cost of trading financial assets as

the bid-ask spread each value of the sample the disparity between purchase price and sale

price divided by the average of the two prices and its calculated over a year, and its equal to

the average of the spread counted for the period.

23

(Alnaif, 2014) explained that there are factors affected the stock liquidity and suppose

some factors that must be taken into account as the following:

Banks size: stock liquidity and firms size are inseparable as the affect each other and a

positive impact for firm‘s size on stock liquidity are expected. Firm’s size will be

increasing, large firms disclose a lot of information to improve their liquidity and try to

attract new investors, thus lead to reduce the information asymmetry.

Banks profitability: investors could be gravitated by firm stocks with high return on assets,

as a result, expected positive impact for firm’s profitability on stock liquidity.

Earnings per share (EPS): negative relationship between earring per share and stock

liquidity when illiquid stock ordering higher return to the investors, when trying to find

specific measure it should be aware that there is no specific measurement but there are

several ways to measure.

For the best result , we use the volume-based measure (turnover) to capture the

liquidity of stocks and using the 0,1 to measure the voluntary disclosures index to

examine its impact on stock liquidity of Jordanian commercial banks listen on Amman

stock exchange .

24

2.2 Literature Review

Pradhan and Shrestha (2016) examine the effect of liquidity on the performance of

Nepalese commercial banks which is a study applied on 16 commercial banks for the years

from 2005 to 2014 with 144 total observations by using multiple regression .The sources of

data were collected from annual reports if commercial bank of Nepal Rasta reports while

the regression models are used to test the significance and effectiveness of bank liquidity

on performance of Nepalese commercial banks , the results indicate that there is negative

impact on the AL ,ROA of bank .

Additionally, positive impact on the bank performance under controlling the liquidity

and quick ratio that the study suggests to be willing with increasing banks performance.

Na'ura (2016) investigates and discusses the relationship between stock market

liquidity and dividend policy for Jordanian banks listed on Amman Stock Exchange during

2009-2014 to find the behavior of dividend payout and examined the stock liquidity as

drivers of dividend policy. The study sample was 15 banks with 90 observations for banks

characteristics (size, profitability and growth opportunity) by using two regression

approaches logistic and OLS regressions to test the relationship. The study found that less

(more) liquid stock are more(less) likely to initiate. The result found the significant

relationship between relative spread, size, profitability and dividend policy, no significant

relationship between stock liquidity and dividend policy, and no sign with growth

opportunities. Finally the researcher recommends the stock market liquidity as one of the

determinants when predicting cash dividend for Jordanian banks listed on Amman stock

liquidity.

25

Kasim (2015) examines the relationship between disclosure and stock market liquidity

which is using the bid-ask spread to measure the liquidity of stock, the research is applied

on firms listed on (ISE) from year 2011 to 2013, and used multiple linear regression by

testing hypotheses to see the effect if the disclosure to stock liquidity and the stock price,

trade volume and the size of the company as controlling variable. The result indicated that

the investors are not responding to information disclose and that there is no significant

effect between stock liquidity and disclosure of the financial reporting of the companies

listed in Indonesia Stock Exchange (ISE).

Ajina et al. (2015) studies the effect of corporate disclosures on information

asymmetry and stock-market liquidity for 196 French firms listed during 2004-2007

concentrated on the significance of information that are included in annual reports of firm

on investors behavior by using bid-ask spread and stock market liquidity .The study shows

that the range of firm disclosure in annual reports positively influences the liquidity of the

French stock market and negatively effects the bid ask spread , the financial and non-

financial information are significant to help investors in their decision making .

The study results found a positive relationship between the level of firm’s disclosure

and stock market liquidity which is fill information provided increases the liquidity of

stocks, and the study found insignificant affect for size on stock liquidity.

Ghorbani et al. (2015) presents the relationship between voluntary disclosure and

stock liquidity of firms listed on the Tehran stock exchange during 2009-2013 by sampling

80 companies were studied as the research sample, voluntary disclosure items determined

by 71 indicators based on the prior studies. The study measures stock liquidity by using

average daily turnover of stocks and the number of daily transactions of stocks by using a

multiple regression to analyze hypotheses.

26

Furthermore, the study found that there is no significant relationship between

voluntary disclosure and stock liquidity, and there is a positive relationship between

liquidity and firm size and profitability.

Schoenfeld (2015) examines voluntary disclosure and Liquidity, proposed to restrict

trading costs must create strategic is prefer to maximize stock liquidity, the hypotheses of

study developed in EU index containing voluntary disclosures items and testing 368 firms

over the period 1996-2010 and 78% of firms included occur as a result of consolidation or

acquisition. The study found that the firms which join the Standard and Poor’s 500

voluntary disclosure will gradually rise with rising property index fund ownership and

therefore, increased in disclosures and stock liquidity, as a result the study found that a

positive relationship between index fund and disclosure.

Hawashe (2014), the study project to help develop the disclosure literature in relation

to the banking sector and to measure the extent of voluntary disclosure provided in the

annual reports of Libyan commercial banks, over the period 2006 to 2011.The objective is

to examine if there has been any significant improvement in the levels of voluntary

information disclosure provided in the annual reports. The study used a self-constructed, un-

weighted disclosure index, comprising of 63 information items, to measure the extent of

voluntary disclosure in 54 annual reports of listed and unlisted commercial banks, over a

six-year reporting period. The research data were analyzed using content, descriptive and

multiple regression analyses. The results show that the extent of voluntary disclosure in the

Libyan commercial bank’s annual reports is low, with an average of 38%. However, there

was an improvement in the general level of voluntary disclosure and its categories over a

six-year period. The multiple regression results indicate that commercial bank size is

27

significant independent variables in explaining variation in annual voluntary disclosure,

while profitability and liquidity are found to be insignificantly associated with the extent of

voluntary disclosure.

Tian (2014) investigates a significant association between the informational of the

firm which is measured by voluntary disclosure levels and the extent of firm-specific

information in corporate into the stock price by measuring stock liquidity listed in

Newzeland stock market and using multi panel data regression. The sample was 297 firms

listed in Newzeland stock market for the 2001-2005 period .The study found positive

relation of voluntary disclosure which will promote transparency in the stock market to

decrease the stock price synchronicity, positively related with idiosyncratic risk, and

negatively with stock price synchronicity

Bischof (2013) attempts to discuss Mandatory Disclosure, Voluntary Disclosure, and

Stock Market Liquidity for 273 financial institutes of banks stress tests listed on European

Union (EU) and the European Free Trade Association (EFTA) during 2009-2012 by testing

the increases in voluntary disclosure increases the liquidity of stocks during 2011 .The study

found that liquidity of market was influenced by voluntarily disclosures ,control variables of

the study was (size, profitability, and capitalization) .The study found significant

relationship between voluntary disclosure and stock market liquidity and significant relation

with size, profitability, and capitalization .

Bokpin (2013) investigates Corporate disclosure, transparency and stock liquidity of

firms listed on Ghana Securities Exchange (GSE) .The study attempts to find and document

experimentally level of transparency disclosure (TDS) .Therefore, seeking to reduce the

information asymmetry on (GSE) with keeping the effectiveness of the liquidity ,measuring

28

liquidity by multidimensional approach .The sample was 27 listed companies during 2003-

2008 .The study shows that TDS significantly restrict the contrast in information between

investors and unawareness ,and also reduce the agency between managers and investors

from conflicts that led to the dereliction Liu (2006) ,firm characteristics was financial

leverage , return on equity and size are significant as control variables of stock liquidity on

the GSE .The study shows that significant positive relationship between disclosure and

stock liquidity as with financial leverage , return on equity and size .

LoukiL and Ouidad (2012) attempt to analyze the relationship between public

disclosure, private information and stock liquidity in Tunisian context by sampling of 41

firms listed in the Tunis stock exchange in 2007.The study indicate that insignificant

relationship between public and private information, and the investors of Tunisian market

are not affected by the information disclosed in both annual reports and websites or stock

liquidity. Thus the regulator must have encouraged Tunisian firms to disclose additional

information through the annual reports. This study does not confirm the signaling theory

expectations but confirms the expectations of behavioral finance theory.

Haddad et al. (2009) attempts to examine the level of voluntary disclosure included in

the annual reports of Jordanian companies and the impact of disclosure level on the stock

liquidity. The study built a construction for disclosures contains 62 items mentioned in the

60 companies non-financial annual reports, firms listed on the Amman Stock Exchange

(ASE) for the year 2004 and used the relative bid-ask spread to measure stock liquidity.

This study contributes to the disclosure literature by providing further empirical evidence of

the association between disclosure level and stock market liquidity in the case of Arab

financial markets (the case of ASE), whose disclosure environment is low. The study found

29

that companies disclosed 28% of the items of information contained in the disclosure

structure and showed that the higher voluntary disclosure information provided in the

Jordanian annual reports reduces the spread between bids and asks , thus increases the stock

market liquidity and suggests that disclosure is a significant factor in increasing a

company’s stock market liquidity .

In (Madrid Stock Exchange), a study was conducted by (Espinosa 2008) investigates

the relation between disclosure and liquidity using a sample of firms listed on (Madrid

Stock Exchange) during 1994 - 2000 for 196 companies with 1372 observations and using

bid ask spread with company characteristics (Volatility, Size, effective Volume, Inverse

price) to test the relationship between disclosure and liquidity of a company listed on

Madrid stock exchange. The study tries to measure the quality of annual reports disclosures

and summarize the quality of disclosures is significantly related to a fatal distance of the

functioning of the stock market liquidity. The study found the positive relationship between

disclosure and liquidity, positive relationship between liquidity and size.

Contribution and deferent of other study:

This study makes several contributions to the literature were examined and settled in many

developed countries markets , for emerging countries the validity of this impact still not in

doubt because there is no evidence for the impact of voluntary disclosure on stock liquidity

in developed countries while found that impact existed in other countries .thus , this study is

prepared to test the validity of impact and matching with developed and emerging markets ,

to the best of my knowledge few studies were investigated this impact in emerging

countries ,this issue not examined in Jordanian emerging market for quoted period

30

2006-2014, the banks characteristics were taken in consideration to doesn’t negate many

researchers.

2.3 Summary of the Literature Review:

Studies of Voluntary Disclosure and Stock Liquidity

Authors

Sample

Year

Outcome

Pradhan and Shrestha

Nepalese Commercial

banks during 2005-2013

2016

-Positive impact between quick ratio

and the banks performance

-Controlling liquidity ratio and quick

ratio increases the bank’s

performance

Na’ura

Jordanian banks listed on

ASE during 2009-2014

2016

-Significant relationship between

stock turnover and dividend policy

-Stock liquidity affected by size and

profitability

Kasim

Firms listed on Indonesia

stock exchange(ISE)

during 2011-2013

2015

-Insignificant effect between stock

liquidity and disclosure of the

financial reporting of the companies

listed in Indonesia stock exchange

(ISE).Positive effect between stock

liquidity and size of firm.

Behzad.Ghorbani et al

Firms listed on the Tehran

stock exchange during

2009-2013

2015

-There is no significant relationship

between voluntary disclosure and

stock liquidity

- There is a positive relationship

between stock liquidity, firm size and

profitability

31

Ajina et al

Firms listed on French

market during 2004-2007

2015

-The study shows positive

relationship between disclosure and

stock market liquidity

-Negative relationship between

stock market liquidity and size.

Jordan. Schoenfeld

Firms index fund during

1996-2010

2015

-Positive relationship between

disclosure and stock liquidity.

-Positive relationship between

stock liquidity and size,

profitability of firm

- Voluntary disclosure. It will

gradually rise with rising property

index fund ownership

- Voluntary disclosure will increase

stock liquidity

Enwei

Firms listed on Newzeland

stock market during

2001-2005

2014

- Found negative relationship of

voluntary disclosure which will

promote transparency in the stock

market to decrease the stock price

synchronicity

-Positively related with

idiosyncratic risk , and negatively

with stock price synchronicity

Abdallah.Hawashe,

Ruddock.Les

Libyan commercial banks

during 2006-2011

2014

- Voluntary disclosure in the

Libyan commercial bank’s annual

reports is low

- Commercial bank size and listing

status are significant independent

variables in explaining variation in

annual voluntary disclosure

32

Jannis Bischof

Financial institutes listed

on EU and EFTA during

2009-2012

2013

-Positive relationship between

voluntary disclosure and stock

market liquidity

-Positive relationship between size

,profitability and stock liquidity

Nadia.LoukiL, Ouidad.Yousfi

Firms listed on the Tunis

stock exchange in 2007

2012

-The result found no relationship

between public and private

information , and the investors of

Tunisian market are not affected

by the information disclosed in

both annual reports and websites or

stock liquidity

-Private information influence

positively on stock liquidity

Haddad.Ayman et al

Firms listed on the

Amman stock exchange

(ASE) for

the year 2004

2009

-Increases the stock market

liquidity and suggests that

disclosure is a significant factor in

increasing a company’s stock

market liquidity (positive)

relationship.

-Positive relationship between size,

profitability, liquidity and stock

liquidity.

Espinosa Monica

Firm listed on MSE during

1994-2000

2008

-Positive relationship between

disclosure and liquidity

-Stock liquidity has positive

relationship with liquidity and size

of firm.

33

Chapter 3: Research Methodology

3.1 Population of the Study

3.2 Sample of the Study

3.3 Data Sources

3.4 Research Design

3.5 Statistical Techniques Used

34

3.1 Population of the Study

The study consists of all 13 commercial Jordanian banks listed in ASE for the period

during 2006-2014, Al-Jarrah (2012). The main reasons to select commercial banks are

summarized in:

Banks data are available in their websites

Banking sector is one of the most growing sectors in Jordan

Although those banks found more challenges in the Jordanian investment growth

Banking sector supports the economy of Jordan

Provides services that guarantee opportunity to expand and attract new entries

Banking sector is compiled for International regulator, international standards,

and international financial reporting standards (IFRS), audit regulation and

corporate governance.

3.2 Sample:

This study covers all Jordanian commercial banks were the total banks listed in

Amman stock exchange 15 banks and two non-commercial bank were excluded from

sample, for the period 2006 to 2014, the total commercial banks listed in ASE were 13 and

Data collected from Amman stock market moreover to the bank’s annual report disclosure

for the years needed and the total observations included in the study were 117. Banks

without enough data for the study period will be excluded.

35

3.3 Data Sources:

The data collected and computed from ASE website (www.ase.com.jo) and the other

data collected from annual reports of banks listed in their website (Amman Stock Exchange,

2016).

3.4 Research Design: (Variables and Measurements)

In order to examine the objective of the study that is the impact of voluntary disclosure

on stock liquidity, the dependent variable, independent variable and control variables were

tested as follows:

3.4.1 The Dependent Variable: Stock Liquidity

The study used Turnover to measure stock liquidity consistent with (Ghorbani, et al.

2015) as follow:

Turnover = the ratio calculated by dividing the total number of share traded during the year

by the average number of shares outstanding for the year .The higher turnover, more liquid

the share of bank.

Turnover= Shares Traded/Shares Outstanding

3.4.2 The Independent Variable: Voluntary Disclosure

The purpose of Scheduling voluntary disclosure items is to select which item that

could be mentioned in the bank annual report. Studies used some listed of voluntary

disclosure items that could not prefer to the population environment. Whereby, if an item is

disclosed rated one (1) and, if not disclosed rated zero (0) were the study used 33 indicator.

The voluntary disclosure items (appendix A) (Hawashe, 2016)

36

3.4.3 Control Variables:

1. Bank Size: there are several ways to measure bank size, the study uses total asset as

measure of banks size and predicting the increase of disclosure related with bank size that is

associated with higher stock liquidity. So, disclosure increases stock liquidity and size

measure by using natural logarithm (Schonefeld, 2015).

Sizeit = Ln of Current Year total assetit

2. Bank Profitability: additional control variable, profitability is expected to have a

positive impact with disclosure measuring by calculating return on asset (ROA) (Schonefeld

,2015)

= Net Profit / Average Total Assets it Return on Assets

3. Bank Asset Liquidity: this variable tries to measure the liquid of bank by using quick

ratio (measured by dividing Current Assets – Inventory – advances – prepayments /Current

Liabilities (Pradhan and Shrestha, 2016)

Quick Ratio = Current Assets - Inventory - Advances - Prepayments

Current Liabilities

3.5 Statistical Techniques Used

Multiple regression method was used to study the impact of voluntary disclosure on

stock liquidity. The method used in the study was logistic regression to explain model and to

examine the relationship between bank voluntary disclosure and stock liquidity for

37

Jordanian banks listed on (ASE) in order to identify the relationship and to show the extent

of the strength.

The following regression models will be used (Erlynda, 2015)

Model

Liit = α + β1 VDit + β2 Pit + β3 BSit + β4 ALit + eit

Where:-

Li Stock Liquidity Ratio for bank i in year t

VD Voluntary Disclosures for bank i in year t

P Profitability of bank i in year t

BS Size of bank i in year t

AL Assets Liquidity for bank i in year t

A The Intercept of the Regression Equation

β1, β2, β3, β4 Regression Co-efficient of Independent Variables

E Error Term

38

Chapter 4: Analysis and Results

4.1 Descriptive Statistics

4.2 Multcollinearity Tests

4.3 Correlation Results

4.4 Hypotheses Testing and Results Discussion

39

Preface

The results of the empirical analysis consisted of three steps; the first step is a

descriptive statistics of the study variables, the second step is to test whether the

multicollinearity problem exists using a correlation analysis as well collinearity diagnostic

and the third step is to test the hypotheses of the study using regression analysis where each

of these analyses and the interpretations of these analyses are presented and discussed in the

following sections.

4.1 Descriptive Statistics

A descriptive statistics for all the study variables were run using number of parameters

such as mean, minimum, maximum and standard deviation as depicted in table (1).

Particularly, table (1) presents the descriptive statistics for the study variables regarding 117

firm-year observations related to (13) commercial banks listed on Amman Stock Exchange

during the period (2006-2014) where return on assets, which is considered an indicator of

how profitable a company is relative to its total assets and gives an idea of how efficient

management is at using its assets to generate earnings, ranges from -0.0017 to 0.0251 with

an average of 0.0144. Furthermore, the company’s ability to meet its short-term obligations

with its most liquid assets ranges from 0.17 to 0.63 with an average of 0.371. Stocks

turnover as a proxy of stock liquidity which measured the relative ease with which an

investor can easily convert a stock into cash ranges from 0.0017 to 0.6714 with an average

of 0.1528. Whereas, the bank’s size ranges from 19.2178 to 23.976 with an average of

21.20858.

Table (1) also showed that voluntary disclosure ranges from 0.5 to 0.95 with an average of

0.794 which implies that the percentage of voluntary disclosure is considered high relative

40

to non-financial companies in Jordan where (Haddad, et, al. 2009) found the mean value of

voluntary disclosure index in companies annual reports across non-financial companies is

about 0.2814

Table.1 Descriptive Statistics for the study variables

Variable N Minimum Mean Maximum Std. Deviation

BS 117 19.21780 21.2085803 23.97600 1.05086373

P 117 -0.00170 0.0144145 0.02510 0.00535504

AL 117 0.17000 0.3711111 0.63000 0.09788080

LI 117 0.00170 0.1528513 0.67140 0.16415429

VD 117 0.50000 0.7944444 0.95000 0.07230139

Note:

Table (1) presents a descriptive statistics for the study variables regarding 117 firm year observations of 13 commercial banks

listed on Amman Stock Exchange during the period (2006-2014):

Li Stock Liquidity Ratio for bank i in year t

VD Voluntary Disclosures for bank i in year t

P Profitability of bank i in year t

BS Size of bank i in year t

AL Bank Assets Liquidity for bank i in year t

41

Descriptive statistics of voluntary disclosure (2006-2014)

In order to gain more insight about the level of voluntary disclosure across study

period, a descriptive statistics through parameter mean value were run for each year

separately, the mean values are shown in table (2) and in Figure (1).

Table (2) and figure (1) indicated that the percentage of voluntary disclosure in banks

annual reports during the study period was in its lower level in year 2006 and 2007 which is

considered prior to the financial crisis period. The investors had the greatest need for

additional information after financial crisis thus effect bad on companies to confirm with

their expectations of the company contributions and performance, companies have

increased their information disclosed to regain confidence of investors (

Kanapathippillai,2010). As well, the percentage of voluntary disclosure in banks annual

reports became higher in 2008 which is considered the financial crisis period. On the other

hand, the percentage of voluntary disclosure in latter part of sample (i.e. post 2008) became

much higher which is considered the post financial crisis period.

42

Table (2) Mean values of Voluntary Disclosure (2006-2014)

Year Mean

2006

0.73653846

2007

0.775

2008

0.78846154

2009

0.80384615

2010

0.80384615

2011

0.80576923

2012

0.81346154

2013

0.82307692

2014

0.81071429

Figure (1)

Figure 1. Percentage of Voluntary Disclosure during (2006-2014)

0.68

0.7

0.72

0.74

0.76

0.78

0.8

0.82

0.84

2006 2007 2008 2009 2010 2011 2012 2013 2014

43

4.2 Multicollinearity Tests

Before interpreting the results of the study, two methods were used to test whether

there is multicollinearity between variables; the correlation matrix and collinearity statistics.

4.2.1 Correlation Matrix

Table (3) provides a correlation matrix between explanatory variables where (Filed,

2002) considered multicollinearity problem exist when correlation coefficient is more than

0.80 or 0.90, however, the table indicates that correlation among independent variables and

control variables is less than 0.8 or 0.90. Whereas, this does not mean that multicollinearity

problem does not exist where according to (Myers, 2000) multicollinearity problem may

exist in spite of that the correlation coefficients are not very high thus further test should be

run to ensure that multicollinearity problem does not exist and this can be done through

variance inflation factors (VIFs) test.

Table 3. Correlation between explanatory variables

Variable BS P AL VD

BS 1

P 0.259** 1

AL 0.190* 0.159 1

VD 0.531** 0.065 -0.021 1

Note: Table (3) presents Pearson correlation coefficients for the explanatory variables regarding 117 firm year

observations of 13 commercial banks listed on Amman Stock Exchange during the period (2006-2014):

VD Voluntary Disclosures for bank i in year t

P Profitability of bank i in year t

BS Size of bank i in year t

AL Bank Liquidity for bank i in year t

** Significant at the 0.01 level (2-tailed). * Significant at the 0.05 level (2-tailed).

44

4.2.2 Collinearity Statistics

As a further test of multicollinearity problem, VIF test was run where table (4)

provides the results of collinearity statistics test. Particularly, table (4) presents the tolerance

test and variance inflation factor (VIF) where multicollinearity problem exists when VIF is

more than 10 and tolerance level is greater than 1 (Gujarati, 2009), however, the table

showed that VIF is less than 10 and tolerance level is less than 1 which means that

multicollinearity was not a problem in interpreting the results of the regression analysis.

Table. 4 Collinearity Statistics Results

Variable

Collinearity Statistics

Tolerance VIF

BS 0.639 1.564

P 0.915 1.092

AL 0.933 1.072

VD 0.699 1.431

4.3 Correlation between dependent and independent variables

In order to test the impact for dependent and independent variable, a bivariate

correlation was used where table (5) provides the correlation coefficients between the

dependent variables and independent variables of the study.

45

Table. 5 Correlation between dependent and independent variables

Variable Correlation Coefficients

BS 0.435**

P 0.308**

AL 0.357**

VD 0.346**

Note:

Table (5) presents Pearson correlation coefficients for the study variable regarding 117 firm year observations

of 13 commercial banks listed on Amman Stock Exchange during the period (2006-2014):

VD Voluntary Disclosures for bank i in year t

P Profitability of bank i in year t

BS Size of bank i in year t

AL Bank Liquidity for bank i in year t

** Significant at the 0.01 level (2-tailed).

* Significant at the 0.05 level (2-tailed).

Table (5) presents correlation coefficients between the study variables. As can be noticed,

bank’s size, bank’s profitability, bank’s liquidity and bank’s voluntary disclosure have

significant positive correlations with stock turnover; that is, the larger the bank size is the

higher the stocks turnover. Furthermore, the higher the bank’s profitability is the higher the

stocks turnover. Additionally, the higher the voluntary disclosure in bank’s annual reports, is

the higher the stocks turnover. As well, high bank’s assets liquidity and thus strong liquidity

position is associated with high stocks turnover and thereby high stock liquidity.

46

4.4 Hypotheses Testing and Results Discussion

In order to achieve the objective of the study to examine the impact of voluntary

disclosure on bank’s stock liquidity, OLS regression analysis was run where table (6) reports

the results of the study model which aims to examine the impact of voluntary disclosure on

bank’s stock turnover as a proxy of banks stock liquidity.

Table. 6 OLS Regression Results

Variable Beta Coefficients T value Sig.

BS 0.208 2.156 0.033*

P 0.193 2.390 0.019*

AL 0.292 3.654 0.000**

VD 0.230 2.487 0.014*

Constant -4.775 0.000

R Square = 0.334 F value= 14.020

Adj-R2 =0.31 Sig.= 0.000

The table provides OLS regression results for the main regression model of the study regarding 117 firm

year observations. The model is:

Liit = α + β1 VDit + β2 Pit + β3 BSit + β4 ALit + eit

Li Stock Liquidity Ratio for bank i in year t

VD Voluntary Disclosures for bank i in year t

P Profitability of bank i in year t

BS Size of bank i in year t

AL Bank Liquidity for bank i in year t

** Significant at the 0.01 level (2-tailed). * Significant at the 0.05 level (2-tailed).

The results as summarized in the table suggest that the 31% variation in the dependent

variable can be explained by the explanatory variables of study. Moreover, this model is

significant with F-statistic value of (14.020) and p=0.000, suggesting that the model is

statistically valid.

47

4.4.1 The first null hypothesis: There is no significant impact for bank's voluntary

disclosure on bank stock liquidity in Jordanian commercial banks listed on ASE

Table 7. Results of OLS regression analysis to examine the impact of voluntary disclosure on stock liquidity

Beta Coefficients T value Sig.

0.230 2.487 0.014*

* Significant at the 0.05 level (2-tailed)

Table (7) revealed that bank’s stocks turnover is affected positively by the extent of

voluntary disclosure in bank’s annual reports at 0.05 level of significance, which implies

that the stock turnover for banks with low information asymmetry (i.e. banks that disclose

voluntary information in their annual reports) is considered high relative to banks with high

information asymmetry (i.e. banks that don’t provide investors with voluntary information).

This provides an indication that investors respond to non-financial data by boosting the

trading volume of companies stocks. Accordingly, the null hypothesis HO1 is rejected and

the alternative one is accepted which states “There is significant impact for bank's

voluntary disclosure on bank stock liquidity in Jordanian commercial banks listed on

ASE”. This result is consistent with Aymanakina et al (2015), Jordan Schoenfeld (2015),

Jannisbischof (2013), Haddad ayman et al (2009), Espinosa monica (2008) and inconsistent

with Erlyndakasim (2015), Bahzadghorbani et al (2015).

4.4.2 The second null hypothesis: There is no significant impact for bank's profitability

on bank stock liquidity in Jordanian commercial banks listed on ASE

Table 8. Results of OLS regression analysis to examine the impact of profitability on stock liquidity

Beta Coefficients T value Sig.

0.193 2.390 0.019*

* Significant at the 0.05 level (2-tailed)

48

As depicted in table (8), the bank’s stocks turnover is affected positively by bank’s

profitability at 0.05 level of significance, an indication that the stock turnover of profitable

banks is higher than less profitable banks. Consequently, the null hypothesis HO11 is

rejected and the alternative one is accepted which states “There is significant impact for

bank's profitability on bank stock liquidity in Jordanian commercial banks listed on

ASE.” This outcome is consistent with Bahzadghordani et al (2015), Jordanschoenfeld

(2015), Jannisbischof (2013), Haddad Ayman et al (2009), Najahattiga et al (2004)

4.4.3 The third null hypothesis: There is no significant impact for bank's size on bank

stock liquidity in Jordanian commercial banks listed on ASE.

Table 9. Results of OLS regression analysis to examine the impact of size on stock liquidity

Beta Coefficients T value Sig.

0.208 2.156 0.033*

* Significant at the 0.05 level (2-tailed)

The results showed that the bank’s shares turnover is affected positively by the bank’s

size at 0.05 level of significance, which implies that the shares turnover in large banks is

considered high relative to small banks. Accordingly, the null hypothesis HO12 is rejected

and the alternative one is accepted which stated that “There is significant impact for

bank's size on bank stock liquidity in Jordanian commercial banks listed on ASE.”

This result is consistent with Erlyndakasim (2015), Bahzadghorbani et al(2015), Jordan

Schoenfeld (2015), Jannisbischof (2013), Haddad Ayman et al (2009), Espinosa Monica

(2008) and inconsistent with Ayman ajina et al (2015), Najahattiga et al (2004)

49

4.4.4. The fourth null hypothesis: There is no significant impact for bank's assets

liquidity on bank stock liquidity in Jordanian commercial banks listed on ASE.

Table 10. Results of OLS regression analysis to examine the impact of liquidity on stock liquidity

Beta Coefficients T value Sig.

0.292 3.654 0.000**

** Significant at the 0.01 level (2-tailed)

Table (10) showed that the bank’s shares turnover is affected positively by bank’s liquidity

at 0.01 level of significance, which indicates that the strong liquidity position increases the

stock turnover and thereby increases the stock liquidity. Accordingly, the null hypothesis

HO13 is rejected and the alternative one is accepted which states that “There is significant

impact for bank's assets liquidity on bank stock liquidity in Jordanian commercial

banks listed on ASE.

”. This result is consistent with Haddad Ayman et al (2009) and inconsistent with

Najahattiga et al (2004).

50

Table (11) The Study Result Summary of Hypotheses Testing

Hypothesis Hypothesis No. Type of Test Result of Test

There is no significant impact for

bank’s voluntary disclosure on

bank’s stock liquidity

HO1

OLS Regression

Reject Null Hypothesis

There is no significant impact for

bank’s profitability on bank’s stock

liquidity

HO11

OLS Regression

Reject Null Hypothesis

There is no significant impact for

bank’s size on bank’s stock liquidity

HO12

OLS Regression

Reject Null Hypothesis

There is no significant impact for

bank’s asset liquidity on bank’s

stock liquidity

HO13

OLS Regression

Reject Null Hypothesis

51

Chapter 5: Conclusion and Recommendations

5.1 Conclusion

5.2 Recommendations

52

5.1 Conclusion

After testing the hypotheses and investigating about them, then turning to overall

conclusion that the main objective of research is to discuss the impact of voluntary

disclosure on stock liquidity in Jordanian Commercial Banks Listed on Amman Stock

Exchange of 13 commercial banks by using voluntary disclosure index to their annual

reports whereas banks characteristics were taken into consideration (Hawashe, 2014). The

impact for voluntary disclosure on stock liquidity examined and tested in many countries

and markets, few studies investigated this impact in Jordan market.

The result of testing hypotheses by using OLS regression to examine the impact of

voluntary disclosure on banks stock liquidity were HO1 indicates that bank’s stock liquidity

is affected positively by the extent of voluntary disclosure in bank’s annual reports at 0.05

level of significance. That implies stock turnover for banks with low information asymmetry

and investors respond to non-financial information whereas increasing voluntary disclosure

leads to increasing in stock liquidity. The result of testing hypotheses HO11, HO12, HO13

using OLS regression indicates that bank’s stocks turnover is affected positively by banks

profitability at 0.05 level of significance ,that stocks turnover of profitable banks is higher

than less profitable banks ,while banks stocks turnover is affected positively by banks size at

0.05 level of significance which implies that the stocks turnover in large banks in considered

high relative to small banks .Furthermore , bank’s stocks turnover is affected positively by

banks liquidity at 0.01 level of significance .

53

5.2 Recommendations

The result of the study conclusions, the researcher recommends the following:

The study recommends and suggests to banks directors that it is better to get attention

about voluntary information to disclose where it is attractive for the investors’ attention and

helps them to take their decisions.

The study recommends testing other factors that affect stock liquidity as mandatory

disclosure, corporate governance and financial ratios.

The study recommends to study the impact of voluntary disclosure on other sectors in

Jordan such as insurance sector, industrial sector and services sector.

For the future studies, it is recommended to use different measurements for study

variables and testing other variables such as financial leverage, age, capitalization of

commercial banks with extending the observations sample of the study.

54

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59

أثر اإلفصاح االختياري على سيولة األسهم في البنوك التجارية األردنية المدرجة في سوق عمان

المالي

إعداد

معاذ محمود عبد الحافظ العبادي

المشرف

الدكتور حسني الشطرات

الملخص

عمان بورصة في المدرجة األردنية التجارية للبنوك سهماأل سيولة على االختياري اإلفصاح تأثير الدراسة، هذه تناقش

سيولة على االختياري فصاحاإل تأثير الختبار التجريبية األدلة أن حين في 2014-2006 الفترة الواقعة بين خالل

بعين األخذ مع مشاهدة 117 والتي احتوت على بحثلل عينةك بنكا 13 دراسة تمت األردني. للسوق محدودة األسهم

فصاح االختياري عناصر لإل تحديد تمو ،خصائص البنوك وهي حجم البنك وربحية البنك وسيولة أصول البنك االعتبار

طريقة ) المتعدد االنحدار باستخدام الفرضيات اختبار تم وقد السابقة، الدراسات في أيضا استخدمت مؤشرا 33 بواقع

حجم ستخداماب األسهم سيولة قياسحيث تم سهم األ سيولة على ختياري اإلفصاح اإل تأثير الختبار( المربعات الصغرى

سهم أ سيولة زيادة إلى ؤديتاالختيارية المرتفعة البنوك ذات األفصاحات أن إلى النتائج وقد أشارت. سهمدوران األ

على درجة عالية من االستجابة ن المستثمرين إحيث االستثمارية القرارات خاذفي ات مما ساعد المستثمرين البنك

التقارير في االختيارية فصاحاتاإل حول جديدة رؤية توفير في الدراسة هذه ساهمت وقد للمعلومات المفصح عنها.

البنوك لدى سهماأل سيولة على كمؤشر االختيارية احاتاإلفص استخدام مكانيةوا ردناأل في التجارية للبنوك المالية

.االردنية التجارية

60

Appendix (1)

Voluntary disclosure items

A. General Information of commercial bank (10)

A-1 Brief narrative history of the bank

A-2 Description of bank Structure

A-3 Description of major services produced

A-4 Address of Bank/telephone/fax

A-5 Bank Website address

A-6 Email address

A-7 Date and details of establishment

A-8 General outlook of business activities

A-9 List of branches location

A-10 Information on branches/telephone/fax/ address for correspondence

B. Social Responsibility Information (4)

B-1 Sponsoring public health, sporting of recreational projects

B-2 Information on donations to charitable organizations

B-3 Supporting national pride/government.-sponsored campaigns

B-4 Information on social banking activities/banking for the society

C. Financial Ratios (19)

C-1 Brief discussion of the banks operating results

C-2 Analysis of banks liquidity position

C-3 Return on assets

C-4 Return on equity

61

C-5 Liquidity ratios

C-6 Earnings per share

C-7 Capital adequacy ratios

C-8 Loan to deposit ratio

C-9 Total dividends

C-10 Dividends per share for the period

C-11 Breakdown of employees by geographic area

C-12 Categories of employees by gender

C-13 Number of branches extension during the current fiscal year

C-14 List of top five shareholders of the bank

C-15 Financial statistics for more than two years

C-16 Comparative Income statement for 2 years

C-17 Comparative balance sheet for 2 years

C-18 Comparative current year and previous year figures

C-19 Cash flow statement

62

Appendix (2)

Jordanian Commercial Banks Listed on Amman Stock Exchange (ASE)

Bank Name Symbol in (ASE) Number in (ASE)

Jordan Ahli Bank AHLI 111033

Arab Bank ARBK 113023

Arab Banking Corporation /(Jordan) ABCO 111009

Arab Jordan Investment Bank AJIB 111005

Bank of Jordan BOJX 111022

Cairo Amman Bank CABK 111021

Capital Bank of Jordan EXFB 111017

The Housing Bank for Trade and Finance THBK 111004

Jordan Commercial Bank JCBK 111003

Jordan Investment & Finance Bank INVB 111014

Jordan Kuwait Bank JOKB 111002

Societe General de Banque - Jordanie SGBJ 111020

AL-Etihad Bank UBSI 111007

63

Appendix (3)

The Descriptive Statistics of Study Variables

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Size 117 19.21780 23.97600 21.2085803 1.05086373

ROA 117 -0.00170 0.02510 0.0144145 0.00535504

QR 117 0.17000 0.63000 0.3711111 0.09788080

Turnover 117 0.00170 0.67140 0.1528513 0.16415429

Disc 117 0.50000 0.95000 0.7970085 0.06988001

Valid N (listwise) 117

Correlations of Study Variables

Correlations

turnover Size ROA QR Disc

turnover Pearson Correlation 1 0.435** 0.308** 0.357** 0.346**

Sig. (2-tailed) 0.000 0.001 0.000 0.000

N 117 117 117 117 117

size Pearson Correlation 0.435** 1 0.259** 0.190* 0.531**

Sig. (2-tailed) 0.000 0.005 0.040 0.000

N 117 117 117 117 117

ROA Pearson Correlation 0.308** 0.259** 1 0.159 0.065

Sig. (2-tailed) 0.001 0.005 0.087 0.487

N 117 117 117 117 117

QR Pearson Correlation 0.357** 0.190* 0.159 1 -0.021

Sig. (2-tailed) 0.000 0.040 0.087 0.825

N 117 117 117 117 117

Disc Pearson Correlation 0.346** 0.531** 0.065 -.021 1

Sig. (2-tailed) 0.000 0.000 0.487 .825

N 117 117 117 117 117

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

64

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 0.578a 0.334 0.310 0.13637114

a. Predictors: (Constant), Disc, QR, ROA, size

ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1 Regression 1.043 4 0.261 14.020 0.000b

Residual 2.083 112 0.019

Total 3.126 116

a. Dependent Variable: turnover

b. Predictors: (Constant), Disc, QR, ROA, size

Coefficientsa

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig.

Collinearity Statistics

B Std. Error Beta Tolerance VIF

1 (Constant) -1.233 0.258 -4.775 0.000

Size 0.032 0.015 0.208 2.156 0.033 0.639 1.564

ROA 5.906 2.471 0.193 2.390 0.019 0.915 1.092

QR 0.489 0.134 0.292 3.654 0.000 0.933 1.072

Disc 0.539 0.217 0.230 2.487 0.014 0.699 1.431

a. Dependent Variable: turnover

65

S.N Name year LN

Asset R.O.A Q.R T.O

voluntary disclosures

%

1 JORDAN AHLI BANK

2006 21.2776 0.0116 0.0059 0.3421 0.600

2007 21.4044 0.0055 0.0057 0.3170 0.800

2008 21.4681 0.0083 0.0045 0.2420 0.825

2009 21.5369 0.0083 0.0039 0.0881 0.850

2010 21.6474 0.0091 0.0036 0.0867 0.850

2011 21.6852 0.0089 0.0033 0.0760 0.825

2012 21.6979 0.0090 0.0034 0.1045 0.825

2013 21.7175 0.0059 0.0031 0.0754 0.850

2014 21.5670 0.0147 0.0031 0.2864 0.850

2 ARAB BANK

2006 23.6378 0.0143 0.0054 0.1625 0.800

2007 23.7782 0.0158 0.0047 0.3281 0.750

2008 23.8479 0.0158 0.0041 0.1574 0.900

2009 23.8631 0.0108 0.0044 0.0676 0.950

2010 23.8726 0.0062 0.0047 0.0644 0.925

2011 23.8980 0.0110 0.0046 0.0436 0.925

2012 23.8977 0.0109 0.0046 0.0417 0.925

2013 23.9235 0.0141 0.0042 0.1695 0.925

2014 23.9760 0.0139 0.0040 0.0510 0.900

3 ARAB BANKING

CORPORATION /(JORDAN)

2006 20.0648 0.0212 0.0050 0.0494 0.800

2007 20.2144 0.0176 0.0047 0.0285 0.700

2008 20.1905 0.0169 0.0042 0.0288 0.700

2009 20.2306 0.0151 0.0037 0.0181 0.750

2010 20.3620 0.0149 0.0034 0.0206 0.750

2011 20.4463 0.0149 0.0019 0.0148 0.775

2012 20.5337 0.0133 0.0020 0.0270 0.775

2013 20.6786 0.0122 0.0022 0.0272 0.750

2014 20.8185 0.0122 0.0028 0.0915 0.725

4 ARAB JORDAN

INVESTEMENT BANK

2006 20.1237 0.0152 0.0048 0.0515 0.675

2007 20.2719 0.0110 0.0050 0.0451 0.675

2008 20.3630 0.0169 0.0041 0.0993 0.775

2009 20.5012 0.0134 0.0040 0.1207 0.775

66

2010 20.5853 0.0136 0.0031 0.0837 0.825

2011 20.6477 0.0128 0.0026 0.0584 0.825

2012 20.7556 0.0145 0.0028 0.0168 0.775

2013 20.9045 0.0139 0.0033 0.0210 0.850

2014 21.2830 0.0139 0.0025 0.0375 0.750

5 BANK OF JORDAN

2006 21.0426 0.0186 0.0045 0.2176 0.825

2007 21.0988 0.0168 0.0038 0.4202 0.825

2008 21.2456 0.0195 0.0031 0.2469 0.700

2009 21.3693 0.0133 0.0034 0.0587 0.850

2010 21.4008 0.0163 0.0037 0.2288 0.850

2011 21.4425 0.0178 0.0030 0.0683 0.875

2012 21.4247 0.0165 0.0032 0.0796 0.875

2013 21.4542 0.0175 0.0025 0.0263 0.875

2014 21.5073 0.0205 0.0028 0.0528 0.875

6 CAIRO AMMAN BANK

2006 20.8878 0.0163 0.0045 0.1097 0.725

2007 21.0003 0.0158 0.0047 0.2329 0.825

2008 21.1032 0.0139 0.0034 0.1361 0.850

2009 21.2811 0.0146 0.0038 0.0640 0.625

2010 21.3349 0.0188 0.0035 0.0884 0.800

2011 21.3861 0.0189 0.0029 0.0227 0.800

2012 21.4285 0.0174 0.0030 0.0456 0.825

2013 21.5176 0.0184 0.0033 0.0197 0.800

2014 21.5790 0.0189 0.0043 0.0350 0.800

7 CAPITAL BANK OF JORDAN

2006 20.5682 0.0211 0.0057 0.1770 0.775

2007 20.6610 0.0144 0.0053 0.3239 0.800

2008 20.7067 0.0155 0.0031 0.3307 0.825

2009 20.7952 0.0012 0.0037 1.0497 0.825

2010 20.9096 0.0043 0.0026 0.3557 0.850

2011 21.0568 0.0010 0.0032 0.0545 0.825

2012 21.1976 0.0137 0.0029 0.0227 0.850

2013 21.3580 0.0196 0.0034 0.2051 0.825

2014 21.4468 0.0176 0.0036 0.1255 0.825

67

8 THE HOUSING BANK FOR

TRADE AND FINANCE

2006 22.1333 0.0231 0.0049 0.0620 0.775

2007 22.3367 0.0222 0.0052 0.3382 0.800

2008 22.4153 0.0187 0.0042 0.0687 0.775

2009 22.5300 0.0109 0.0047 0.0127 0.825

2010 22.6223 0.0132 0.0047 0.0118 0.825

2011 22.6603 0.0144 0.0040 0.0030 0.850

2012 22.6822 0.0147 0.0035 0.0032 0.850

2013 22.7011 0.0148 0.0031 0.0021 0.850

2014 22.7507 0.0163 0.0036 0.0010 0.875

9 JORDAN COMMERCIAL

BANK

2006 20.0561 0.0208 0.0040 0.2739 0.700

2007 20.1241 0.0226 0.0040 0.3565 0.850

2008 20.2583 0.0149 0.0030 0.1077 0.775

2009 20.2614 0.0088 0.0029 0.2267 0.825

2010 20.4525 0.0057 0.0026 0.0017 0.800

2011 20.5023 -0.0017 0.0022 0.0247 0.775

2012 20.5541 0.0024 0.0027 0.0149 0.750

2013 20.7768 0.0030 0.0022 0.0868 0.850

2014 20.8792 0.0086 0.0019 0.0145 0.825

10 JORDAN INVESTMENT &

FINANCE BANK

2006 20.3256 0.0145 0.0053 0.6714 0.775

2007 20.3653 0.0091 0.0045 0.1804 0.850

2008 20.3424 0.0130 0.0044 0.1919 0.750

2009 20.3179 0.0109 0.0027 0.0199 0.825

2010 20.3335 0.0161 0.0020 0.1530 0.650

2011 20.3548 0.0139 0.0028 0.1162 0.750

2012 20.3787 0.0159 0.0027 0.0336 0.500

2013 20.4734 0.0153 0.0026 0.0408 0.775

2014 20.5066 0.0154 0.0021 0.0402 0.775

11 JORDAN KUWAIT BANK

2006 21.2239 0.0243 0.0039 0.2081 0.825

2007 21.4247 0.0225 0.0042 0.1196 0.825

2008 21.4473 0.0238 0.0033 0.5477 0.800

2009 21.4835 0.0210 0.0035 0.0120 0.825

2010 21.4575 0.0251 0.0029 0.0090 0.800

68

2011 21.5447 0.0175 0.0036 0.0584 0.775

2012 21.6027 0.0193 0.0035 0.0137 0.700

2013 21.6603 0.0186 0.0036 0.0208 0.825

2014 21.6825 0.0179 0.0030 0.0191 0.825

12 SOCIETE GENERALE DE

BANQUE - JORDANIE

2006 18.9080 0.0201 0.0051 0.3190 0.775

2007 19.2178 0.0099 0.0048 0.0310 0.750

2008 19.4353 0.0145 0.0052 0.0120 0.800

2009 19.5212 0.0143 0.0043 0.0418 0.775

2010 19.6522 0.0134 0.0042 0.6107 0.750

2011 19.7043 0.0090 0.0025 0.0141 0.675

2012 19.9882 0.0099 0.0037 0.0137 0.750

2013 20.2782 0.0109 0.0027 0.0003 0.675

2014 20.5800 0.0106 0.0043 0.0032 0.700

13 UNION BANK FOR SAVING

& INVESTMENT

2006 20.6088 0.0139 0.0049 0.4650 0.750

2007 20.7891 0.0129 0.0063 0.2669 0.725

2008 20.8494 0.0138 0.0045 0.1742 0.750

2009 21.0994 0.0112 0.0037 0.1729 0.775

2010 21.1547 0.0139 0.0040 0.2513 0.800

2011 21.1028 0.0071 0.0043 0.5173 0.800

2012 21.2829 0.0084 0.0050 0.1913 0.875

2013 21.3797 0.0117 0.0028 0.4046 0.875

2014 21.5371 0.0117 0.0017 0.0511 0.825