The Impact of Cash Holdings and Economic Factors on the Economic Value Added in the Commercial Banks

Ade Sameer ibrahim Al-Nimri, Kahtan Samerrai

Abstract


The purpose of this research was to investigate the impact of cash holdings and economic factors on the economic value added in the commercial banks in Jordan. This research employs panel data analysis to updated data using Jordanian commercial banks annual reports and regression analysis to examine the impact. The research found that there is a statistical significant impact of cash holdings on the Economic Value Added. Also, there is a statistical significant impact of Net Interest Margin on the Economic Value Added. Moreover, the research found that there is a statistical significant impact of Real Gross Domestic Product (RGDP) on the Economic Value Added, and there is a statistical significant impact of inflation on the Economic Value Added. Finally, the researcher used the bank size as a control variable to study the impact and the research found that there is a statistical significant impact of cash holdings value and the Real Gross Domestic product (RGDP) on the Economic Value Added under the shallow of the bank size. Also, there is no statistical significant impact of Net Interest Margin (NIM) and inflation on the Economic Value Added in Jordanian commercial banks under the shallow of the bank size.

Keywords


The Impact, Cash Holdings, Economic Value Added, Real Gross Domestic Product, Net Interest Margin, inflation,Economic Factors, Bank Size.

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