Moderating effect of competitive strategies on the relation between financial leverage and firm performance: evidence from Jordan

• Authors: Al-Rdaydeh Mahmoud , Almansour Amar Yasser , Al-Omar Mohammad Ahmad
• Languages of publication: EN

Abstracts

This study examined the moderating role of competitive strategy in the relationship between financial leverage and performance of firms based on a sample of industrial firms in Jordan between 2007 and 2016. The interaction between competitive strategy and financial leverage was revealed to influence the effects of financial leverage towards the performance of firms in terms of return on assets (accounting-based measure) and market-to-book ratio (market-based measure). Conclusively, obtained results are in line with the notion that firms that employ cost leadership strategy experience tax advantages and increased efficiency through debt financing and/or debt covenants. This study extends the overall understanding on the effects of financial leverage towards performance of firms and how this relationship is moderated by competitive strategy among firms in an emerging market such as Jordan.

Keywords

EN

Financial leverage; firm performance; competitive strategies; industrial firms; Jordan

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2018
• Volume: Volume 14
• Issue: Issue 3
• Pages: 626-641

Dates

published

2018-06-14

Contributors

author

Al-Rdaydeh Mahmoud

• Faculty of Economic and Business, Jadara University, Jordan

author

Almansour Amar Yasser

• Faculty of Business, Amman Arab University, Jordan

author

Al-Omar Mohammad Ahmad

• Faculty of Business, Amman Arab University, Jordan

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