Does Solvency Management Affect Firm Value? Evidence from Emerging Countries

The current research work aims to reveal the solvency management’s impact on the firm value of listed companies on the Amman Stock Exchange. The methods of statistical analysis and tests are adopted to obtain and analyze data. The study sample consisting of 34 industrial companies listed on the Amman Stock Exchange from 2016 to 2020, with 170 views is used. The findings indicate that there is no effect of long-term and short-term solvency management on the firm value represented by the return on assets of industrial companies listed on the (ASE). On the on hand, the findings indicate that there is a significant negative impact of long-term solvency management on the return on equity. On the other hand, the findings show that although there is no effect of short-term solvency management on the return on equity, the company size as a controlling variable affects the return on assets as well as the return on equity where the impact trend is positive. Also, there is no effect on sales growth as a control variable on the firm value of industrial companies listed on the (ASE).