The Impact of Capital Structure on Stock Returns in Industrial Jordanian Companies Listed in Amman Stock Exchange: Role of the responsibilities of the Board Directors, and disclosure and transparency as Moderating variables

Abstract

This study examines the effect of capital structure on Stock Returns in the presence of the disclosure, transparency, and responsibilities of the Board of Directors as Moderating variables. During the period 2014–2018, data were collected for 60 industrial companies listed on the ASE.  The results show that the capital structure in its dimensions ( short-term debt to equity, long-term debt to equity, and total debt-to-total asset ) has an impact on stock returns. Moreover, this analysis finds that there is an influence of the Board of Directors' responsibilities, as well as disclosure and transparency, in improving the impact of the capital structure in its dimensions ( short-term debt to equity,  long-term debt to equity, and total debt to total assets) on the stock returns. Furthermore, the findings recommend that Jordanian industrial companies rely on short-term loans while reducing long-term borrowing to evade the firms paying higher interest rates.