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The Mediating Role of Profitability in the Impact Relationship of Assets Tangibility on Firm Market Value

Author

Listed:
  • Mustafa Alathamneh

    (Accounting Department, Business School, Jadara University, Irbid 21110, Jordan)

  • Mohammed Ibrahim Obeidat

    (Accounting Department, Business School, Jadara University, Irbid 21110, Jordan)

  • Mohammad Abdullah Almomani

    (Accounting Department, Business School, Jadara University, Irbid 21110, Jordan)

  • Tareq Mohammad Almomani

    (Custom and Tax Science Department, Business School, Jadara University, Irbid 21110, Jordan)

  • Nadeen (Mohammed Adnan) Darkal

    (Department of Business Administration, Business School, Jadara University, Irbid 21110, Jordan)

Abstract

This study aims to investigate whether the asset tangibility of the listed mining and extraction firms at the Amman Stock Exchange institution affects the market value of these firms and whether firm profitability mediates the impact relationship of asset tangibility on firm market value. To achieve the objectives of this study, secondary data covering the period 2013–2022 of the entire listed mining and extraction firms were collected and used in the analysis. Tobin’s Q is used as a good indicator of firm market value, while return on assets is used as a common indicator of firm profitability. Asset tangibility is the percentage relationship of tangible fixed assets to total assets. Employing both the single and multiple linear regression methods, the results showed a significant impact of asset tangibility on firm profitability and firm market value. The results also demonstrated that firm profitability has a significant impact on firm market value. In addition, the results revealed that firm profitability mediates the effect of asset tangibility on firm market value. The empirical findings have important implications when policies that lead to higher firm value are adopted and correctly followed. More research is recommended to investigate this relationship in other industries.

Suggested Citation

  • Mustafa Alathamneh & Mohammed Ibrahim Obeidat & Mohammad Abdullah Almomani & Tareq Mohammad Almomani & Nadeen (Mohammed Adnan) Darkal, 2025. "The Mediating Role of Profitability in the Impact Relationship of Assets Tangibility on Firm Market Value," JRFM, MDPI, vol. 18(2), pages 1-17, February.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:2:p:104-:d:1593589
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    References listed on IDEAS

    as
    1. Zaroug Othman Mohammed & Mawih Kareem Al Ani, 2020. "The Effect of Intangible Assets, Financial Performance and Financial Policies on the Firm Value: Evidence from Omani Industrial Sector," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(3), September.
    2. Tio Pasukodewo & Neneng Susanti, 2020. "The Impact of Profitability on Stock Valuation and Its Impact on Corporate Value," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 46-55, April.
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