Financial Performance and Firm Market Value: The Moderating Role of the Extensible Business Reporting Language (XBRL)

Abstract

The study aimed to examine the relationship between financial performance, as measured by its indicators, and the market value of the company. It also sought to identify the moderating role of electronic disclosure using XBRL (as a moderating variable) on the relationship between financial performance and the company's market value. The study followed a descriptive-analytical approach.

The study sample consisted of Jordanian industrial public shareholding companies listed on the Amman Stock Exchange, totaling 46 companies at the time of data collection. The final sample included 30 industrial companies, representing 65.2% of the study population.

The study relied on published annual financial reports of the sample industrial companies for the period (2017–2022), as well as bulletins issued by the Amman Stock Exchange available on its official website, to collect the necessary data for measuring the study variables.

For data analysis, descriptive statistical methods were used, along with multiple linear regression analysis and hierarchical interaction regression analysis to test the study hypotheses, using the (E-Views) software.

The results revealed a statistically significant relationship between financial performance and its indicators and the company’s market value. They also indicated a statistically significant effect of XBRL on the relationship between financial performance and the company's market value.

The study recommended that Jordanian industrial companies adopt disclosure policies that enhance financial performance, improve operational efficiency, increase revenues, expand profit margins, and generate higher returns. It also recommended mandating companies to implement electronic disclosure using the XBRL system and integrate it with their accounting systems to facilitate clearer and more accurate information presentation.