The Retained Earnings Effect on the Firm’s Market Value: Evidence from Jordan

Firas N. Dahmash (), Hashem Alshurafat, Raed Hendawi, Abdallah Bader Alzoubi and Hamzeh Al Amosh ()
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Firas N. Dahmash: Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan
Hashem Alshurafat: Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan
Raed Hendawi: Faculty of Economics and Administrative Sciences, Yarmouk University, Irbid 21163, Jordan
Abdallah Bader Alzoubi: Department of Accounting, Business School, The Hashemite University, P.O. Box 330127, Zarqa 13133, Jordan
Hamzeh Al Amosh: Ministry of Education and Higher Education, Doha 35111, Qatar

IJFS, 2023, vol. 11, issue 3, 1-11

Abstract: The aim of this study was to investigate the effect of the retention per share compared to the dividend per share by modeling the firm’s market value as a function of the retention per share and the dividend per share for all firms in the Jordanian context using unbalanced panel data analysis for a sample of 2281 firm years covering the period from 2010 to 2021. The results of the pooled sample indicated a strong positive significant effect for dividends per share. However, the retention per share indicated a negative significant effect on the firm’s market value. The other robustness analysis for the two sub-samples and the financial and non-financial sub-samples indicated the same results, consistent with the pooled sample for the two main explanatory variables.

Keywords: retention per share; dividend per share; emerging markets; Jordan (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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