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Year 2015, Volume: 2 Issue: 2, 0 - 0, 29.06.2015

Ghassan Omet Bashar Abu Khalaf Hadeel Yaseen

Abstract

References

  • Alsherif, M. (2015), The Determinants of Financial Development: Empirical Evidence from Egypt, The Macrotheme Review, 4, p. 69-87.
  • Andrianaivo, M. and Yartey, C. (2009), Understanding the Growth of African Financial Markets, IMF Working Paper, No. 1
  • Ang, J. (2008), A Survey of Recent Developments in the Literature of Finance and Growth, Journal of Economic Surveys, 22, p. 536-576.
  • Ascioglu, A., C. Comterton-Forde and McInish, T. (2010), An Examination of Minimum Tick sizes on the Tokyo Stock
  • Exchange, Japan and the World Economy, 22, p. 40-84. Bagehot, W. (1873), Lombard Street. Homewood, IL: R. Irwin 1962 edition.
  • Berkman, H. and Nguyen, N. (2010), Domestic Liquidity and Cross-listing in the United States, Journal of Banking and Finance, 34, p. 1139-1151.
  • Chekili, S. and N. Abaoub (2013), Estimation of the Bid-Ask Spread: Applications on the Tunis Stock Exchange,
  • Global Business and Economics Research Journal, 2, p. 24-33. Cherif, M. and Dreger, C. (2014), Institutional Determinants of Financial Development in MENA countries,
  • German Institute for Economic Research Discussion Paper No. 1422.
  • Demsetz, H. (1968), The Cost of Transacting, The Quarterly Journal of Economics, 82, p. 33-53.
  • Ding, M., B. Nilsson and Suardi, S. (2013), Foreign Institutional Investors and Stock Market in China: State
  • Ownership, Trading Activity and Information Asymmetry, The Knut Wicksell Centre for Financial Studies, Working Paper No. 14, Lund University. Dodd, O. (2013), Why Do Firms Cross-List Their Shares on Foreign Exchanges? A Review of Cross-Listing Theories and Empirical Evidence, Review of Behavioural Finance, 5, p. 77-99.
  • Domowitz, I. (2001), Liquidity, Transaction Costs and Re-Intermediation in Electronic Markets. Financial E
  • Commerce of the Federal Reserve Bank of New York. FitzGerald, V. (2006), Financial Development and Economic Growth: A Critical View, Background Paper for the World Economic and Social Survey.
  • Gagnon, M. and Gimet, C. (2013), The Impacts of Standard Monetary and Budgetary Policies on Liquidity and Financial Markets: International Evidence from the Credit Freeze Crisis. Journal of Banking and Finance, 37, p. 4599-4614.
  • Greenwood, J. and Jovanovic, B. (1990). Financial Development, Growth, and the Distribution of Income. Journal of
  • Political Economy, 98, p. 1076-1107.
  • Hansen, S. and Sung Suk, K. (2013), Influence of stock liquidity to firm value in Indonesian stock market, The 2013
  • IBEA, International Conference on Business, Economics, and Accounting 20 – 23 March 2013, Bangkok – Thailand.
  • Heibatollah, S. and Zhou, H. (2008), The Economic Consequences of Increased Disclosure: Evidence from Cross
  • Listings of Chinese Firms, Journal of International Financial Management and Accounting, 19, p. 1-27. Hicks, J. (1969), A Theory of Economic History. Oxford: Clarendon Press.
  • Ito, H. (2006). Financial Development and Financial Liberalization in Asia: Thresholds, Institutions and the Sequence of Liberalization. North American Journal of Economics and Finance, 17, p. 303-327.
  • Jiang, C., Kim, J. and Wood, R. (2011), A Comparison of Volatility and Bid-Ask spread for NASDAQ and NYSE After
  • Decimalization, Applied Economics, 43, p. 1227-1239.
  • King, R. and Levine, R. (1993), Finance and growth: Schumpeter Might be Right, Quarterly Journal of Economics, 108, p. 717-737.
  • Kubo, K. (2008), Do foreign currency deposits promote or deter financial intermediary development in low- income countries? An Empirical Analysis of Cross-Country Data, The Developing Economies, 3, p. 264-289.
  • Kuo, S., Huang, C. and Chen, C. (2010), Impact of the Change in Tick Size on Transaction Costs and Liquidity: An
  • Empirical Investigation of the Taiwan Stock Exchange, Asia-Pacific Journal of Financial Studies, 39, p. 524-551. Levine, R. (1991), Stock Markets, Growth, and Tax Policy, Journal of Finance, 46, p. 1445-1465.
  • Levine, R. (2004), Finance and Growth: Theory and Evidence, NBER, Working Paper No. 10766.
  • Levine, R. and Zervos, S. (1996), Stock Markets, Banks, and Economic Growth, World Policy Research Working Paper, No. 1690.
  • Lucas, R. (1988), On the Mechanics of Economic Development, Journal of Monetary Economics, 22, p. 3-42.
  • Madyan, M., Salim, U. and Anshori, M. (2013), Liquidity Determinants of Sharia and Non Sharia Stocks, IOSR
  • Journal of Business and Management, 9, p. 28-38. Nyasha, S. and Odhiambo, N. (2014), Bank-Based Financial Development and Economic Growth: A Review of
  • International Literature, Journal of Financial Economic Policy, 6, p. 112-132. Panizza, U. (2013), Financial Development and Economic Growth: Known Knowns, Known Unknowns, and Unknown Unknowns, Graduate Institute of International and Development Studies Working Paper No.14, Geneva.
  • Pasali, S. (2013), Where is the Cheese? Synthesizing a Giant Literature on Causes and Consequences of Financial
  • Sector Development, World Bank Policy Research Working Paper No. 6655, Washington, D.C.
  • Raza, S., Shahzadi, H. and Akram, M. (2014), Exploring the Determinants of Financial Development (Using Panel Data on Developed and Developing Countries), Developing Country Studies, 4, p. 115-122.
  • Robinson, J. (1952), The Generalization of the General Theory, in The Rate of Interest and Other Essays, MacMillan, London, UK.
  • Schumpeter, J. (1934), The Theory of Economic Development, 1912, Translated by Redvers Opie. Harvard
  • University Press, Cambridge, USA. Tinic, S. (1972), The Economics of Liquidity Services, The Quarterly Journal of Economics, 86, p. 79-93.
  • Tinic, S. & West, R. (1974), Marketability of Common Stocks in Canada and the USA: A Comparison of Agent Versus
  • Dealer Dominated Markets, The Journal of Finance, 3, p. 729-746. Yaseen, H., Omet, G. and Abdel-Halim, M. (2015), The 2008 Global Financial Crisis: The Case of a Market with
  • Consistent Losses Ever Since. Eurasian Journal of Business and Management, 3, p. 8-19. Zhuang, J., Gunatilake, H. Niimi, Y. Khan, M. Hasan, R. Khor, N. Lagman-Martin, A., Bracey, P. and Huang B. (2009), Financial Sector Development, Economic Growth, and Poverty Reduction: A literature Review, Asian
  • Development Bank Working Paper No. 173.

ON THE BID-SPREAD IN THE JORDANIAN BANKING SECTOR:

Year 2015, Volume: 2 Issue: 2, 0 - 0, 29.06.2015

Ghassan Omet Bashar Abu Khalaf Hadeel Yaseen

Abstract

This paper measures the bid-ask spread for all listed Jordanian banks and examines its’ determinants. Based on a total of 15 banks and the time period 2012-2014, the results show that Jordanian banks’ stocks suffer from relatively high liquidity cost. This finding has a number of implications to the banks’ cost of capital, and the behavior of their stocks’ return.  In addition, unless the management of the capital market takes the issue of stock liquidity more seriously, it is argued that such listed firms (banks) might choose to cross-list their stocks or leave the local market altogether and list their stocks abroad. As expected, the objective of such a move is to improve their stocks’ liquidity and hence, realize the envisaged benefits.

References

  • Alsherif, M. (2015), The Determinants of Financial Development: Empirical Evidence from Egypt, The Macrotheme Review, 4, p. 69-87.
  • Andrianaivo, M. and Yartey, C. (2009), Understanding the Growth of African Financial Markets, IMF Working Paper, No. 1
  • Ang, J. (2008), A Survey of Recent Developments in the Literature of Finance and Growth, Journal of Economic Surveys, 22, p. 536-576.
  • Ascioglu, A., C. Comterton-Forde and McInish, T. (2010), An Examination of Minimum Tick sizes on the Tokyo Stock
  • Exchange, Japan and the World Economy, 22, p. 40-84. Bagehot, W. (1873), Lombard Street. Homewood, IL: R. Irwin 1962 edition.
  • Berkman, H. and Nguyen, N. (2010), Domestic Liquidity and Cross-listing in the United States, Journal of Banking and Finance, 34, p. 1139-1151.
  • Chekili, S. and N. Abaoub (2013), Estimation of the Bid-Ask Spread: Applications on the Tunis Stock Exchange,
  • Global Business and Economics Research Journal, 2, p. 24-33. Cherif, M. and Dreger, C. (2014), Institutional Determinants of Financial Development in MENA countries,
  • German Institute for Economic Research Discussion Paper No. 1422.
  • Demsetz, H. (1968), The Cost of Transacting, The Quarterly Journal of Economics, 82, p. 33-53.
  • Ding, M., B. Nilsson and Suardi, S. (2013), Foreign Institutional Investors and Stock Market in China: State
  • Ownership, Trading Activity and Information Asymmetry, The Knut Wicksell Centre for Financial Studies, Working Paper No. 14, Lund University. Dodd, O. (2013), Why Do Firms Cross-List Their Shares on Foreign Exchanges? A Review of Cross-Listing Theories and Empirical Evidence, Review of Behavioural Finance, 5, p. 77-99.
  • Domowitz, I. (2001), Liquidity, Transaction Costs and Re-Intermediation in Electronic Markets. Financial E
  • Commerce of the Federal Reserve Bank of New York. FitzGerald, V. (2006), Financial Development and Economic Growth: A Critical View, Background Paper for the World Economic and Social Survey.
  • Gagnon, M. and Gimet, C. (2013), The Impacts of Standard Monetary and Budgetary Policies on Liquidity and Financial Markets: International Evidence from the Credit Freeze Crisis. Journal of Banking and Finance, 37, p. 4599-4614.
  • Greenwood, J. and Jovanovic, B. (1990). Financial Development, Growth, and the Distribution of Income. Journal of
  • Political Economy, 98, p. 1076-1107.
  • Hansen, S. and Sung Suk, K. (2013), Influence of stock liquidity to firm value in Indonesian stock market, The 2013
  • IBEA, International Conference on Business, Economics, and Accounting 20 – 23 March 2013, Bangkok – Thailand.
  • Heibatollah, S. and Zhou, H. (2008), The Economic Consequences of Increased Disclosure: Evidence from Cross
  • Listings of Chinese Firms, Journal of International Financial Management and Accounting, 19, p. 1-27. Hicks, J. (1969), A Theory of Economic History. Oxford: Clarendon Press.
  • Ito, H. (2006). Financial Development and Financial Liberalization in Asia: Thresholds, Institutions and the Sequence of Liberalization. North American Journal of Economics and Finance, 17, p. 303-327.
  • Jiang, C., Kim, J. and Wood, R. (2011), A Comparison of Volatility and Bid-Ask spread for NASDAQ and NYSE After
  • Decimalization, Applied Economics, 43, p. 1227-1239.
  • King, R. and Levine, R. (1993), Finance and growth: Schumpeter Might be Right, Quarterly Journal of Economics, 108, p. 717-737.
  • Kubo, K. (2008), Do foreign currency deposits promote or deter financial intermediary development in low- income countries? An Empirical Analysis of Cross-Country Data, The Developing Economies, 3, p. 264-289.
  • Kuo, S., Huang, C. and Chen, C. (2010), Impact of the Change in Tick Size on Transaction Costs and Liquidity: An
  • Empirical Investigation of the Taiwan Stock Exchange, Asia-Pacific Journal of Financial Studies, 39, p. 524-551. Levine, R. (1991), Stock Markets, Growth, and Tax Policy, Journal of Finance, 46, p. 1445-1465.
  • Levine, R. (2004), Finance and Growth: Theory and Evidence, NBER, Working Paper No. 10766.
  • Levine, R. and Zervos, S. (1996), Stock Markets, Banks, and Economic Growth, World Policy Research Working Paper, No. 1690.
  • Lucas, R. (1988), On the Mechanics of Economic Development, Journal of Monetary Economics, 22, p. 3-42.
  • Madyan, M., Salim, U. and Anshori, M. (2013), Liquidity Determinants of Sharia and Non Sharia Stocks, IOSR
  • Journal of Business and Management, 9, p. 28-38. Nyasha, S. and Odhiambo, N. (2014), Bank-Based Financial Development and Economic Growth: A Review of
  • International Literature, Journal of Financial Economic Policy, 6, p. 112-132. Panizza, U. (2013), Financial Development and Economic Growth: Known Knowns, Known Unknowns, and Unknown Unknowns, Graduate Institute of International and Development Studies Working Paper No.14, Geneva.
  • Pasali, S. (2013), Where is the Cheese? Synthesizing a Giant Literature on Causes and Consequences of Financial
  • Sector Development, World Bank Policy Research Working Paper No. 6655, Washington, D.C.
  • Raza, S., Shahzadi, H. and Akram, M. (2014), Exploring the Determinants of Financial Development (Using Panel Data on Developed and Developing Countries), Developing Country Studies, 4, p. 115-122.
  • Robinson, J. (1952), The Generalization of the General Theory, in The Rate of Interest and Other Essays, MacMillan, London, UK.
  • Schumpeter, J. (1934), The Theory of Economic Development, 1912, Translated by Redvers Opie. Harvard
  • University Press, Cambridge, USA. Tinic, S. (1972), The Economics of Liquidity Services, The Quarterly Journal of Economics, 86, p. 79-93.
  • Tinic, S. & West, R. (1974), Marketability of Common Stocks in Canada and the USA: A Comparison of Agent Versus
  • Dealer Dominated Markets, The Journal of Finance, 3, p. 729-746. Yaseen, H., Omet, G. and Abdel-Halim, M. (2015), The 2008 Global Financial Crisis: The Case of a Market with
  • Consistent Losses Ever Since. Eurasian Journal of Business and Management, 3, p. 8-19. Zhuang, J., Gunatilake, H. Niimi, Y. Khan, M. Hasan, R. Khor, N. Lagman-Martin, A., Bracey, P. and Huang B. (2009), Financial Sector Development, Economic Growth, and Poverty Reduction: A literature Review, Asian
  • Development Bank Working Paper No. 173.
There are 44 citations in total.

Details

Journal Section Articles
Authors

Ghassan Omet This is me

Bashar Abu Khalaf This is me

Hadeel Yaseen This is me

Publication Date June 29, 2015
Published in Issue Year 2015 Volume: 2 Issue: 2

Cite

APA Omet, G., Khalaf, B. A., & Yaseen, H. (2015). ON THE BID-SPREAD IN THE JORDANIAN BANKING SECTOR:. Journal of Economics Finance and Accounting, 2(2).

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