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- ItemAGENCY COST OF FREE CASH FLOW, FIRM PERFORMANCE AND MODERATING ROLE OF FINANCIAL LEVERAGE AND DIVIDEND POLICY: THE CASE OF PALESTINE CORPORATIONS(2022-09-22) Mahmoud Yousef MahmoudBackground: Free Cash Flow (FCF) is considered one of the main sources of agency problems between management and shareholders. These problems result from separating management from owners and using this money in a way that does not serve the shareholders’ interests. This leads to harming the performance of the company. Therefore, the owners strive to control these behaviors by controlling the financial policies, thus reducing FCF in the hands of the managers. Objectives: This study sought to find out the effect of overinvestment, as a proxy for the agency problem of FCF, on the company’s performance and the moderating role that both debt and dividend policies play in reducing the negative impact of overinvestment on the financial performance of companies in Occupied Palestine. Methodology: The study participants were 31 non-financial companies listed on the Palestine Stock Exchange (PSE) from 2010 to 2019.The accounting data was collected manually from the financial reports (balance sheets and income statements) of the companies while the market data was collected from the PSE website. This study adopted overinvestment as a proxy for the agency cost of FCF; it was measured through the investment demand function. This study also used the Ordinary Least Squares (OLS) method to test these relationships. Results: This study has found that overinvestment negatively affected the performance of companies in Occupied Palestine. It was measured by five accounting metrics: EBIT, EBT, ROA, ROE, and EPS. It has also found that debt could mitigate the negative impact of overinvestment on financial performance, which is consistent with Jensen's 1986 FCF theory. However, the study has not found evidence about the role of dividend policy in reducing the negative impact of overinvestment on the performance of companies in in the country. The combination of debt and dividend policies has not proven/yielded any significant effect. Recommendations: Based on the study findings, the researcher recommends using debt as an effective tool to reduce agency problems for FCF in Occupied Palestine companies. He also suggests administering the study to the financial sectors and companies in neighboring countries to generalize the findings more reliably. Keywords: Free cash flow; agency problem of FCF; dividend policy; debt policy; firm performance; Occupied Palestine.
- ItemDETERMINANTS OF BANK NET INTEREST MARGIN: EVIDENCE FROM MENA COUNTRIES(2023-03-26) Ajyad Mojeed Ahmad BahlaqThe net interest margin in the dual banking system is not well documented. While previous studies tested the determinants of each bank type (Islamic and conventional banks) separately or using a dummy representing the Islamic bank. The study is concerned with the differences between Islamic and conventional banks. The study examines the factors driving net interest margins in the Middle East and North Africa using Islamic banksas a moderating variable. Also, uncover the effect of interest rate risk, its interaction with credit risk, and institutional variables that are first to investigate in the region. This study uses panel of 511 banks in twenty countries for the period (2006 - 2018). Net interest margin is the dependent variable while the size of operation, risk aversion, credit risk, liquidity risk, specialization in lending, inflation, gross domestic product, interest rate risk, the interaction between interest risk and credit risk, control of corruption, rule of law, and regulatory quality are the independent variables while Islamic banks is the moderating variable. For analyzing the data pooled models, fixed effect models, random effect models, and generalized method of moments were used. This study conclude the negative effect of the size of operation, credit risk, the interaction between interest risk and credit risk, liquidity risk, regulatory quality, and rule of law on the net interest margin while a positive effect of inflation, gross domestic product, interest rate risk, specialization in lending, and Islamic bank. In addition, it is concluded that liquidity risk affect the net interest margin of Islamic bank more than conventional banks. It is recommended banks that focus on diversifying their operations and encourage Islamic banks to adopt new risk management instruments, in addition to enhancement of the governance frameworks such as contract enforcement. Keywords: Dual banking; Islamic bank; MENA region; Net interest margin.
- ItemDeterminants of Credit Risk in the MENA Region: A Comparative Study Between Islamic Banks and Conventional Banks(An-Najah National University, 2021-04-03) قشتم, رناThis thesis investigates the determinants of credit risk in both Islamic banks and conventional banks. It concentrates on the differences of the determinant of credit risk between Islamic and conventional banks in the Middle East and North Africa region (MENA). Banks’ specific characteristics and country-level determinants were examined using two models to investigate this study's objectives. The credit risk was measured by the non-performing loans for an unbalanced sample of 197 Islamic and conventional banks in the MENA region for 2010-2018. The results show that bank-specific and country-level factors drive credit risk. The assumptions needed to be fulfilled for OLS were tested, and the model was found to fit the purpose. Using fixed effect panel regression, results showed that return on asset, bank size, capital adequacy, asset quality, inflation, and regulatory quality are the main determinants of the banks’ credit risk. Moreover, the results uncover that Islamic banks in the MENA region face higher credit risk than the conventional banks. There is a positive relationship between asset's poor quality and credit risk, while a negative relationship between bank size, return on asset, capital ratio and credit risk are observed. For country-level determinants, inflation and regulatory quality as focal determinants have a negative impact on credit risk. The results also show that the bank type's effect is negative on the relationship between asset poor quality and credit risk. It can be concluded that Islamic banks are less affected by asset poor quality than conventional banks. Other bank-specific and country-level independent variables appear to have the same impact on credit risk in both types of banks. Future research on credit risk determinants may consider the banking system's development and more institutional factors when explaining banks' credit risk in the MENA region. The overall findings indicate that both macroeconomic and bank-specific factors do have significant effects on credit risk.
- ItemDOMESTIC VERSUS FOREIGN BANKS PROFITABILITY: EVIDENCE FROM PALESTINE AND JORDAN(2023-06-05) Haya Fawzi Abu-ALrubThis study compares the profitability of Palestinian and Jordanian foreign and domestic banks from 2008 to 2019. In this study, the researcher used specific bank data to determine the difference between domestic and foreign banks operating in Palestine and Jordan. The data was collected from the individual banks' financial statements. Moreover, the researcher used a set of control variables that include macroeconomic data for the two countries, which the researcher collected from the World Bank database. The sample consists of 7 local and 7 foreign Palestinian banks and another 16 local and 8 foreign Jordanian banks. For the analysis, the researcher applied the panel data model. Return on assets, return on equity, and net interest margin are used to approximate banks' profitability. Our results are important to investors, creditors, decision-makers, regulators, and boards of directors as they are interested in the performance of the banking institutions. The researcher measured the profitability of banks using three distinct dependent variables: return on assets (ROA), return on equity (ROE), and net interest margin (NIM). The independent variables include bank specific factors and control variables. Bank specific factors include profitability, liquidity and risk. Control variables include macroeconomic indicators such as growth in gross domestic product (GDP), and inflation. After analyzing the 35 local and foreign banks in Palestine and Jordan from 2008 to 2019, and assessing their profitability with return on assets, return on equity, and net interest margin, the results showed higher liquidity and profitability for foreign banks. In addition, the bank specific internal factors significantly affected the banks’ profitability measured by return on assets (ROA) and return on equity (ROE), except for Assets Quality Ratio (AQ) and liquidity (LIQ) for local and foreign banks. Furthermore, liquidity (LIQ) had a significant impact only on Net Interest Margin (NIM), as it explained 3.9% of its variability. Keyword: bank profitability, domestic banks, foreign banks, internal & external factors.
- ItemDynamic Capital Structure and Country Level Corruption: Evidence from the MENA Region(Ayat A. Hakawati, 2020-11-26) Hakawati, AyatThis thesis aims to investigate the determinants of capital structure and to provide new evidence and shed the light on the impact of corruption on firm’s financial decision in Middle East and North Africa region. Firm specific characteristics as well as country level determinants were examined to provide new evidence on the role of both levels of determinants of capital structure from this region. The two levels of variants were examined according to the three main theories; tradeoff, pecking order, and agency theory. Throughout the achievement of previous goals; this thesis examined the speed of adjustments by which the non-financial firms in MENA region adjust back to the target capital structure. The sample consists of 861 non-financial firms in the period of 2005-2018. The results show that the financial decision is driven by both firm and country specific factors. The results reveal that profitable firm and firm with higher growth opportunity uses less debt to finance its assets. While a positive relationship between tangibility and size, from one side, and leverage ratio, from the other, is observed. For country level determinants GDP and inflation are found to positively affect the firm’s leverage on long run while corruption as a focal determinant has negative impact on firm leverage. Because the Corruption Perception Index (CPI) – an annual index on a scale of 0 to 100 with higher values indicating lower levels of corruption. Showes a positive relation but negative impact. Negative impact means the higher the corruption level in a country; the lower level of leverage used by firms as source of financing. The results also show that firms place a target capital structure at which they adjust gradually. However, slow speed of adjustment was recognized when using book leverage as proxy for capital structure. On the other hand speed of adjustment increases when the market leverage is used. It can be concluded that trade-off, agency and pecking order theories are all explain the capital structure decision of non financial firms. Furthermore, non-financial firms in MENA region use mix of internal and external resources of financing. In addition firm and country level independent variables appear to contribute to adustment towred target capital and corruption is one of these variables. The study recommend for further reseearch on MENA region using more detailes in mesuring proxies for capital structure and firms leverage. In addition to consider the development of financial markets when explaining the capital structure of the MENA region. And to add more macroeconomic factors as determinants of capital structure.
- ItemInfluence of Board Interlocking, Board Structure and Ownership Structure on the Financial Performance of Palestinian Corporations(An-Najah National University, 2021-05-29) عنتري, لؤي صالح محمدThis thesis purpose is to examine the impact of ownership structure, board characteristics, and board interlocking on corporate financial performance of listed firms at Palestine exchange. The data was obtained through the manual examination of the annual reports of listed companies at the Palestinian Exchange (PEX) for the period from 2011 to 2018. Besides, the market value of the stocks listed in the market. The researcher investigated the entire listed corporations. The thesis findings CEO duality, existence of women on the board, foreign ownership and corporate size has positive effect on ROA. However, frequency of board meetings, board size, number of interlocking, interlocking per board, institutional ownership, large ownership and corporate financial leverage have negative relationship with ROA. According to the Tobin`s Q there is positive effect for frequency of board meetings, number of interlocking, interlocking per board member, foreign ownership, institutional ownership and large ownership on corporate financial performance. However, there is negative effect for board size, CEO duality, women in the board, corporate financial leverage and corporate size on financial performance. In terms of practical implications, this research demonstrated that companies should decrease the board interlocking by ensuring to supplement new board members who are not interconnected. There is a necessity to keep the size of the board to a minimum size as that will give the companies the potential and power to carry out their supervision activities efficiently. Furthermore, the board of directors should include professional and experts who have good experience, awareness and knowledge with the controlling and oversight duties and activities. Eventually, there is necessity to rationalize the number of board meetings. Besides, Capital Market Authority and the other supervisory organizations should set rules and regulations that decrease the large ownership and institutional ownership in Palestinian listed. Eventually, there is a necessity to adopt policies and laws that promote and encourage foreign ownership in listed companies at the Palestinian exchanges.
- ItemLiquidity Risk Management Practices: A comparative study between Islamic and Conventional Banks in Palestine(جامعة النجاح الوطنية, 2020-09-02) Al-Ashqar, RaghadBanks face numerous kinds of risks including liquidity risk. The issue of liquidity is the most important issue in the banking sector (conventional and Islamic), where the bank may lose customers as a result of the lack of sufficient liquidity, or the inability to meet their withdrawals in a timely manner. Moreover, banks are accountable toward the supervisory authorities, which affects the reputation of the financial institution in case of liquidity shortage. On the other hand, the bank may maintain more liquidity than it needs, resulting in a situation of inefficient use of available resources. Therefore the existence of proper liquidity management increases the confidence of the supervisory authorities and depositors. With the financial institutions, conventional banks can utilize numerous devices to manage this sort of hazard. Islamic banks, however, are constrained in utilizing portion of these instruments. In this manner, it is critical to comprehend the idea of liquidity risk in Islamic and conventional banks and what variables can influence it. A mixed research approach methodology was used in this thesis. The qualitative approach was conducted with a sample of 3 Islamic banks and 3 conventional banks. Open questions were used to collect data from Islamic and conventional bankers. A quantitative research methodology was used to model the liquidity risk in Islamic and conventional banks of Palestine. Capital adequacy ratio (CAR), return on equity (ROE), deposits to assets (DA), bank size (BS), and bank nationality has been used to test their impact on liquidity risk for both Islamic and conventional banks over the period 2009-2018. The finding of this thesis has revealed that there is a positive relation between deposits to assets and liquidity risk, a negative and significant relation between capital adequacy ratio and liquidity risk for the banks in Palestine. While the effect of interaction variable “Islamic bank” on the effect of DA, ROE and CAR on liquidity were found to be significant. Findings of this paper will help banks' management to decrease liquidity risk and keep their banks at a better liquidity position. Banks managers should be increasingly cautious when financing their customers as expanding financing can deteriorate liquidity. Some recommendations of this thesis involve that banks should have integrated liquidity management framework and increase their investment portfolio because the existence of the liquidity issue with banks means not to fully employ the sources of funds. Moreover, banks should have a specialized liquidity division. Furthermore, Palestine Monetary Authority, though stand prepared to help and bailout any bank confronting liquidity issues, should enforce Israeli side to remit the Shekel currency; hence, it must review the current relationships with Israeli banks and find a new sustainable mechanism that serves the interests of the Palestinian banking
- ItemUNSYSTEMATIC RISK IMPACT ON BANKING STABILITY: ISLAMIC VS. CONVENTIONAL BANKS IN PALESTINE AND JORDAN(2023-03-16) Safaa Khalil SalahThe main objective of this study is to verify the relationship between credit risk and liquidity risk on the stability of banks for a data set of 35 Conventional Banks (CB) and Islamic Banks (IB) belonging to Palestine and Jordan - with the following distribution (11) conventional banks and (3) Islamic banks in Palestine, and (17) conventional banks and (4) Islamic banks in Jordan was observed during 2008-2019,By performing a panel smooth threshold regression model, where this model was used because it takes into account the linear and non-linear relationships. The Z-score (ROA) was used as a dependent variable, non-performing loans from loans, and the ratio of liquid assets from assets, a proxy for credit risk, and liquidity risks, respectively, refer to transition variables, in addition to a set of control variables associated with the characteristics of bank and the macroeconomics. The results show that the relationship between the bank's stability and credit risk, and the bank's stability and liquidity risk is non-linear, and is characterized by the presence of two optimal thresholds equal to 11.41% for credit risk and 20.15% for liquidity risk. The results showed that credit risks do not affect the stability of banks, while liquidity risks negatively affect stability. With regard to the control variables that are bank-specific, the results show that both size and capital adequacy have a significant positive effect on stability, and after the threshold, it becomes negative in both equations. In terms of macroeconomic variables, it was found that political stability has a strong effect on the stability of banks. It was also found that the type of bank affects stability, as conventional banks are more stable than Islamic banks in Palestine and Jordan. Therefore, to ensure the stability of banks, the study recommends that banks choose the appropriate restructuring to ease their small size and enhance capital. Keywords: credit risk, liquidity risk, stability, PSTR model, Islamic bank, conventional bank.
- Itemالنظام الضريبي وتأثيره على العجز في الخزينة العامة(ِAn-Najah National University, 2019-11-11) عواد, عروبهدفت هذه الدراسة إلى التعرف على النظام الضريبي وتأثيره على العجز في الموازنة العامة، من خلال الإجابة على أسئلة الدراسة المتعلقة بالموضوع، حيث تمثلت مشكلة الدراسة من خلال الإجابة على السؤال الرئيس: ما تأثير النظام الضريبي على العجز في الموازنة العامة للسلطة الوطنية الفلسطينية؟ واستخدمت الباحثة المنهج الوصفي التحليلي من خلال إعداد استبيان تم توزيعه على عينة من موظفي وزارة المالية والدوائر الضريبية في الضفة الغربية.
- Itemأثر تطبيق الحوكمة على الأداء المالي للشركات غير المدرجة في بورصة فلسطين(ِAn-Najah National University, 2019-11-21) أبو سنينة, ضرغامهدفت الدراسة للتعرف إلى أثر تطبيق الحوكمة على الأداء المالي للشركات غير المدرجة في بورصة فلسطين، ولتحقيق هدف الدراسة استخدم الباحث المنهج الوصفي والتحليلي، وتم الاعتماد على أداة الاستبانة، التي تكونت من (39) فقرة موزعة على مجالات (حماية حقوق أصحاب المصالح، مسؤوليات مجلس الإدارة، الإفصاح والشفافية، الأداء المالي). وتكوّن مجتمع الدراسة من جميع المحاسبين ومدققي الحسابات والمدراء الماليين في الشركات غير المدرجة في بورصة فلسطين في محافظات الضفة الغربية والبالغ عددهم (976) مبحوثاً، اختير منهم عينة مكوّنة من (200) محاسباً ومدققاً وميراً مالياً، بعد المسح الشامل لمجتمع الدراسة واستخدم برنامج (Smart- PLS 3) الإحصائي لتحليل معلومات الدراسة. وكان من أهم نتائج الدراسة ما يأتي، أولاً: يوجد أثر (لحماية حقوق أصحاب المصالح، ولمسؤوليات مجلس الإدارة، وللإفصاح والشفافية) على الأداء المالي للشركات غير المدرجة في بورصة فلسطين. ثانياً: يوجد علاقة ارتباط إيجابية ومعنوية بين بعد (حماية حقوق أصحاب المصالح، مسؤوليات مجلس الإدارة، الإفصاح والشفافية) وبين بعد (الأداء المالي)، وكان ترتيب العوامل هو: مسؤوليات مجلس الإدارة، الإفصاح والشفافية، ومن ثم حماية حقوق أصحاب المصالح على التوالي. وتوصي الدراسة بالتوصيات الآتية: أولاً: ضرورة قيام إدارات الشركات غير المدرجة في بورصة فلسطين بزيادة الوعي لدى العاملين فيها في المستويات كافة، بأهمية تطبيق قواعد الحوكمة المتعلقة بمسؤوليات مجلس الإدارة وأثارها المالية المتوقعة على الأداء المالي، ثانياً: ضرورة اهتمام الشركات غير المدرجة في بورصة فلسطين بمبادئ الحوكمة والمتعلقة بتحقيق الشفافية والإفصاح عن أنشطتها المالية وغير المالية وربحيتها وعوائدها والتي هي أحد مبادئ الحوكمة وذلك للوصول إلى التقييم العادل لنتائجها المالية. ولنتائج الاستثمارات التي تحفز المستثمرين للدخول إليها.
- Itemأثر تطبيق إدارة الجودة الشاملة على أداء موظفي دوائر ضريبة الدخل في فلسطين(2019-02-06) هادي, عماد هاني حطابهدفت الدراسة للتعرف إلى أثر تطبيق مبادئ إدارة الجودة الشامة على تحسين أداء موظفي دوائر ضريبة الدخل في فلسطين، وسعت الدراسة لتحقيق عدة أهداف كان منها: تحديد كل من (أثر القيادة والرؤية السليمة، أثر المشاركة والمبادرة من قبل العاملين، أثر التحسين المستمر، أثر تطبيق مفهوم النظام) في تحسين أداء موظفين دوائر ضريبة الدخل في فلسطين. وكان من أهم نتائج الدراسة، أولاً: توجد علاقة طردية قوية بين إدارة الجودة الشاملة والأداء الوظيفي لدى الموظفين العاملين في الدوائر الضريبية ويتحقق ذلك من خلال تطبيق عناصر الجودة الشاملة (القيادة والرؤية السليمة، المشاركة والمبادرة من العاملين، اللوائح والقوانين (النظام)، التحسين المستمر). وثانياً: توجد علاقة طردية قوية بين (القيادة والرؤية السليمة، المشاركة والمبادرة من العاملين، اللوائح والقوانين (النظام)، التحسين المستمر) والأداء الوظيفي للعاملين في الدوائر الضريبية. ومن أهم توصيات الدراسة: أولاً: ضرورة الاهتمام بتطبيق عناصر وأبعاد إدارة الجودة الشاملة والتركيز على الأبعاد الأكثر أهمية وتأثيراً على الأداء الوظيفي، فهذه الدراسة لم تركز على كل أبعاد الجودة الشاملة لتحقيق المستوى المطلوب من الأداء الوظيفي بل ركزت على الأبعاد الخمسة التي ترتبط وتتأثر بالأداء الوظيفي بشكل مباشر، وثانياً:حث الإدارة العليا في الدوائر الضريبية على توضيح أهمية تطبيق إدارة الجودة الشاملة على الأداء لكل الموظفين من أعلى السلم إلى أسفله، فهذا أدعى إلى رفع مستوى الأداء الوظيفي.
- Itemتأثير الشمول المالي على النمو الاقتصادي والفقر والاستقرار المالي في فلسطين دراسة قياسية للفترة ما بين (2010 – 2020)(An Najah National University, 2022-03-22) صالح عبد المعطي عمرية, مصطفىهدفت الدراسة الى التعرف على تأثير الشمول المالي على النمو الاقتصادي والفقر والاستقرار المالي في فلسطين دراسة قياسية للفترة ما بين (2010 – 2020) والوقوف على حجم تأثير الشمول المالي على عدد من المؤشرات الاقتصادية الهامة مثل النمو الاقتصادي، ونصيب الفرد من الناتج الإجمالي، ونسب الفقر بالنسبة لعدد السكان، والاستقرار المالي المقاس بإجمالي القروض المتعثرة، حيث تمت مراجعة الادبيات والدراسات السابقة لتحديد الإطار النظري لهذه الدراسة. ولغرض تحقيق اهداف الدراسة تم استخدام المنهج الوصفي التحليلي، حيث تم إجراء اختبار طريقة العامة للحظات (GMM) بالطريقة العامة، حيث تم جمع البيانات عن طريق البيانات المالية والتقارير السنوية للبيانات التي تصدرها البنوك بشكل سنوي في الفترة ما بين 2010 – 2020. واظهرت نتائج الدراسة: أنه يوجد أثر معنوي سلبي للشمول المالي من خلال عدد الحسابات المصرفية وأجمالي الودائع ونسبة التضخم على النمو الاقتصادي، كما تبين وجود إثر معنوي سلبي لمتغير التسهيلات المصرفية على نسبة الفقر، كما وجد أثر معنوي سلبي على متغير الودائع عند مستوى على مستوى الاستقرار المالي، وتبين انه يوجد أثر إيجابي معنوي للشمول المالي لمتغير نسبة التضخم على نسبة الفقر الى عدد السكان، يوجد إثر معنوي إيجابي للتسهيلات المصرفية على الاستقرار المالي. وبناء على نتائج الدراسة ظهرت مجموعة من التوصيات من اهمها: ضرورة العمل على توزيع التخصص بين البنوك في توزيع القروض، ويجب على الجهات الحكومية المصرفية مراقبة الحسابات المصرفية قدر الإمكان كونها تؤثر سلباً على النمو الاقتصادي من خلال وضع قوانين أكثر تشددا في حال امتلاك نفس الفرد أكثر من حساب مصرفي، هذا ويجب على سلطة النقد اتخاذ إجراءات حازمة تجاه تنظيم القروض الاستهلاكية، وضرورة توسيع المنتجات المالية لأولئك الذين يعانون من نقص الخدمات.