The association between accounting disclosures and stock market price: an empirical study on Jordanian commercial banks

Abstract

The main aim of the study is to provide empirical evidence about the association between accounting disclosures and market value of stock price. The study uses a sample of the accounting disclosures for a number of commercial banks listed in Amman Stock Exchange (ASE). These disclosures include; the market value of stock price (MVP) that represents the dependent variable, whereas other disclosures, return on assets (ROA), debt ratio (DR), dividends yield (DY), price earnings ratio (PER), trading volume (TV), and change in customers deposits (CD) represent the independent variables. The study's methodology follows a quantitative approach using multiple regression method. The data were collected from the annual reports of the selected banks from 2012 to 2015. The results show that ROE, PER, and CD are positively correlated to market value of stock price, while the other variables; DR, DY and TV were found negatively correlated to market value of stock price. However, these findings generally indicate that accounting disclosures have a significant impact and associated with market value of stock price for Jordanian financial sector particularly the commercial banks.