Citation

Mohammad Almhairat, Jawad Nayel and Kwan, Jing Hui and Nguyen, Thi Phuong Lan (2024) Conceptual Framework for Investment Efficiency in Jordan: Interplay of Earnings Management, Agency Costs, and Reporting Quality. PaperASIA, 40 (6b). pp. 157-164. ISSN 0218-4540

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Abstract

This paper develops a conceptual framework to examine the interplay between earnings management, agency costs, financial reporting quality, and tax burden, and their collective impact on corporate investment efficiency within the context of Jordan’s emerging market. By integrating insights from agency theory, accounting information theory, and taxation theory, the framework seeks to advance understanding of how these financial dynamics influence firm value in environments characterized by regulatory and market volatility. Through a comprehensive analysis of relevant literature and the synthesis of existing theories, this study posits that earnings management erodes investment efficiency, while high-quality financial reporting and reduced agency costs enhance it. The framework also considers the moderating role of tax burden in these relationships. These insights are crucial for Jordanian policymakers and corporate leaders, underscoring the urgent need for stringent financial governance and transparent reporting standards to optimize investment efficiency. By situating these insights within the context of an emerging market, this research fills a notable gap in the literature, offering practical recommendations for policymakers and corporate leaders aimed at bolstering Jordan’s economic resilience and attractiveness to global investors. The study's implications extend beyond Jordan, providing relevant lessons for other emerging markets with similar economic challenges.

Item Type:	Article
Uncontrolled Keywords:	Financial reporting
Subjects:	H Social Sciences > HG Finance > HG4001-4285 Finance management. Business finance.
Divisions:	Faculty of Management (FOM)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	06 Feb 2025 07:16
Last Modified:	06 Feb 2025 07:16
URII:	http://shdl.mmu.edu.my/id/eprint/13373

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