Cash flow volatility and leverage: Evidence from non-financial Jordanian companies

Author:

Fawzi Shubita Mohammad1ORCID

Affiliation:

1. Ph.D., Professor, Amman Arab University

Abstract

This study investigates the relationship between cash flow volatility and leverage in Jordanian firms. The research purpose is to investigate whether cash flow volatility affects a company’s capital structure in Jordan. Panel data analysis is used in this study for a sample of 72 shareholder non-financial companies in Jordan from 2009 to 2020. The findings show that cash flow volatility has a significant link with leverage, indicating that companies with higher cash flow volatility tend to use more debt financing. In addition, the study finds that firm size, return on assets, and tangibility are positively associated with leverage, while growth is not significantly related. The study suggests that firms in Jordan should take cash flow volatility in consideration when making capital structure decisions. The study provides evidence that cash flow volatility is a vital determinant of leverage in Jordanian companies. The findings suggest that managers should consider the cash flow volatility effect on the capital structure alternatives of their firms. AcknowledgmentI want to thank Amman Arab University for its support.

Publisher

LLC CPC Business Perspectives

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics,Finance

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Relationship between Jordan’s corruption level and company capital structure;Investment Management and Financial Innovations;2024-06-27

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