Mediating Effects of Liquidity in the Relationship between Earnings Quality and Market Value of the Share Price: Evidence from Jordan

  • Malik Abu Afifa Faculty of Business, Al-Zaytoonah University of Jordan, Amman, Jordan
  • Fares Alsufy Faculty of Business, Isra University, Amman, Jordan
  • "Mohammed Zakaria" Soda Faculty of Business, Isra University, Amman, Jordan
Keywords: Information opacity, Earnings quality, Investor protection, Emerging market shares, Industrial Companies


The current study aims to investigate the effect of earnings quality on the market value of the share price, and then the role of liquidity as a mediating effect in the relationship between earnings quality and the market value of the share price. This study provides some empirical evidence from an emerging market, especially from Jordanian market. The framework of this study is developed by the classical valuation theory that discusses the factors that affect the market value of the shares prices. In addition, this study is a quantitative study using a panel data analysis. The study population includes all Jordanian industrial public shareholding companies listed in the Amman Stock Exchange (ASE) during the year 2012 to the year 2017, where there are 62 industrial companies listed in ASE during this period. The study sample is all targeted companies which are included in the study population. In other words, it uses the comprehensive sample method. In conclusion, a high earnings quality and more liquidity in Jordanian industrial public shareholding companies increase their market value of the shares prices. At the same time, liquidity mediates the relationship between earnings quality and the market value of the shares prices of those companies. Moreover, the level of Jordanian market controlling of earnings quality and liquidity is a good one. The study recommended to continually investigating the relationship between organization factors and earnings management, which may have a positive effect on the market value of the shares prices.


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How to Cite
Abu Afifa, M., Alsufy, F., & Soda, "Mohammed Z. (2020). Mediating Effects of Liquidity in the Relationship between Earnings Quality and Market Value of the Share Price: Evidence from Jordan. Review of Applied Socio-Economic Research, 19(1), 17-32. Retrieved from