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2019 Publications

Academy of Accounting and Financial
Studies Journal

Volume 23, Issue 5, 2019

THE IMPACT OF DISCLOSURE OF THE FINANCIAL STATEMENTS AT
THE LEVEL OF INFORMATION ASYMMETRY BETWEEN INVESTORS:

AN EMPIRICAL STUDY ON THE COMMERCIAL BANKS IN JORDAN

Sa’ad Al-Sakini
The aim of this study is to determine the impact of periodic disclosure of financial statements of
commercial banks of Jordan listed in Amman Stock Exchange (ASE) on the level of information
asymmetry between investors in the bank’s shares during 2016-2017. The study is based on a sample
of all (13) Jordanian commercial banks listed on ASE. The stud used the daily trading data for these
banks for the years 2016 and 2017. The study used three independent variables include periodic
disclosure, trading volume and market value per share. While the dependent variable includes
asymmetric information calculated by the daily difference between best purchase order and best offer
for sale the share divided by the average daily rate. The results of the statistical analysis of the study
variables found a negative, with statistically significant, impact of the periodic disclosure of the
financial statements of Jordanian commercial banks on the level of information asymmetry between
investors in banks' shares. The results also showed a negative and significant effect of the trading
volume on the level of information asymmetry, while the market value per share has a positive and
significant effect on the information asymmetry. The study emphasizes the importance of periodic
disclosures and their direct effects on reducing the level of information asymmetry between investors
and in raising the financial market efficiency. It recommends policy makers and financial market
authorities in Jordan to introduce more frequent disclosure regime, which help investor to get more
timely information, and thus reducing information asymmetry.
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