The Role of Information Technology in Raising the Efficiency of
Amman Stock Exchange Mediated by the Behavior of the Stock Prices
MUTASIM ALDABBAS
Department of Economic and Finance, Faculty of Business,
Al-Balqa Applied University,
Amman, 11937,
JORDAN
YASER AHMAD ARABYAT
Department of Economic and Finance, Faculty of Business,
Al-Balqa Applied University,
Amman, 11937,
JORDAN
TAHA BARAKAT AL-SHAWAWREH
Department of Managerial and Finance, Karak College University,
Al-Balqa Applied University,
Karak, 13547,
JORDAN
GHAITH ABU ALFALAYEH
Department of Management Information System and Business Intelligence, Faculty of Technology,
Cardiff Metropolitan University,
Cardiff, FQWQ+95,
UK
MOHAMMAD ZAKARIA ALQUDAH
Department of Accounting and Finance, Faculty of Economics and Business,
University of Zaragoza,
Zaragoza, 50009,
SPAIN
Abstract: - The study aimed to explore the role of information technology in raising the efficiency of the
Amman Stock Exchange, mediated by the behavior of the stock prices. The study chose a sample consisting of
24 companies that are listed on the Amman Stock Exchange. The study used the average of the abnormal return
of the stocks gained by companies through information technology applications. The study carried out a
multiple regression analysis to explore the degree to which the independent variable affected the dependent
one. The study results found that the abnormal return of the stocks gained by companies through information
technology applications is low. The study also found that there is a significant relationship between using IT
applications and the efficiency of the Amman Stock Exchange, mediated by the behavior of the stock prices.
Therefore, the study recommends expanding the scope of using IT in emerging stock markets, including the
Amman Stock Exchange, with the aim of raising the operational efficiency of such markets.
Key-Words: - Information technology, Stock Exchange Efficiency, Amman Stock Exchange, behavior of the
stock prices
Received: November 21, 2022. Revised: April 27, 2023. Accepted: May 13, 2023. Published: May 23, 2023.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
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1 Introduction
The development of the economy is significantly
aided by the financial markets. They represent the
improvements and innovations in the economy that
takes place in every economy. In the financial
markets, there are many different exchangers, [25].
Stock exchange marketplaces must exhibit high
levels of efficiency to safeguard the interests of the
exchangers who use them. Raising the outward
efficiency and operational efficiency of such
markets is, therefore, necessary, [29]. Managers will
be able to acquire a competitive advantage in terms
of information if they are knowledgeable about the
worth of their companies, potential prospects, and
profitability. In addition, those managers may have
challenges while releasing financial papers on the
market if the anticipated earnings are dependent on
the evaluation of such papers, [40]. Market
participants can use the activities of managers as a
leading indicator, [11]. Companies have a big
impact on how information is reflected that
investors can use to evaluate stock prices. To
increase the effectiveness of the financial market
and positively affect stock prices, managers in
businesses and exchangers in the financial markets
rely heavily on IT applications, [14].
The most crucial factor that profoundly
influences how effectively stock markets operate is
the availability of data and information in the
requisite quality, quantity, and timing. All stock
market traders must have access to such data and
information, [21]. One of the most crucial factors is
the speed with which sales and purchases are carried
out, as well as judgments about reducing exchange
costs, [18]. Having investors make judgment calls
that are marked by intelligence and precision
without guessing the outcome is one of them, [38].
Through a robust telecommunications network and
operating infrastructure, the management of stock
exchange marketplaces hopes to make it possible for
exchangers to contact them, [43]. By improving the
stock exchange market's operational efficiency and
giving traders, investors, and businesspeople the
most information possible, they hope to achieve
this. They strive to make sensible selections at every
turn, [45]. The establishment of financial
intelligence units can help with that. These
organizations support the provision of accurate data
and software that streamlines the process of making
judgments in stock market markets. Therefore, it is
necessary to investigate the connection between the
financial market's efficiency and its reliance on IT,
[34], [33], [32], [20]. Therefore, the problem of the
study is represented in the following question:
"What is the role of IT in raising the efficiency of
the Amman Stock Exchange Market as mediated by
the behaviour of the stock prices?"
The study aimed to explore the role of IT in raising
the efficiency of the Amman Stock Exchange
Market mediated by the behaviour of the stock
prices. To meet this goal, the researchers of the
study aimed to offer answers to the questions below:
Q.1: What is the reality of relying on IT in raising
the efficiency of the Amman Stock Exchange
Market mediated by the behaviour of the stock
prices?
Q.2: is there any statistically significant relationship
between IT and the efficiency of the Amman Stock
Exchange Market mediated by the behaviour of the
stock prices?
This study contributes to the IT plays in
releasing information about the stocks of companies
that are listed on financial exchanges that has
several advantages over other samples. The IT in
Jordan is explained in more detail as Jordan is
rapidly spreading and is currently one of the few
countries where the Efficiency of the Amman Stock
Exchange is largely IT-developed. Additionally, this
study adds to the knowledge of the IT usefulness of
the Efficiency of the Amman Stock Exchange and
the Behavior of the Stock Prices. However, the
findings of this study have implications for
investors’ standard setters, regulators, and
policymakers. Prudence (Stock Exchange and the
Behavior of the Stock Prices) has just been
reintroduced into the conceptual framework to
Encourage and motivate new subjects. The study
results found that the abnormal return of the stocks
gained by companies through information
technology applications is low. The study also found
that there is a significant relationship between using
IT applications and the efficiency of the Amman
Stock Exchange, mediated by the behaviour of the
stock prices
The study intends to shed light on the role that
IT plays in releasing information about the stocks of
companies that are listed on financial exchanges.
Because it is necessary to disclose this information,
given how quickly financial and non-financial
information about stocks of firms is exchanged
because of the development of ICT. Additionally,
support those in charge of the Amman Stock
Exchange in their fight against any activities that
could result in the improper use of IT and harm the
effectiveness of the financial markets. Additionally,
make ideas and proposals that assist in resolving
issues with Jordan's financial market's efficiency,
particularly those that relate to IT. Subsequently, the
rest of this essay is structured as follows: The paper
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
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is organized as follows: Section 2 examines the
literature; Section 3 presents research data,
population, model, and techniques; Section 4
presents results, and Section 5 wraps up the paper.
2 Theoretical Literature
2.1 IT in Stock Exchange Markets
When one of the parties to the transaction has more
information (or better information) than the other
party or parties, the IT applications are upgraded. In
other words, they are updated when the supplier (for
example) knows more about a particular product
than the consumer, [36]. When the borrower knows
more about his creditworthiness than the lender,
they are upgraded. When the executive manager is
more knowledgeable about the company's earnings
and future than the shareholders are, they are
upgraded, [9]. When insurance company clients
know more about the dangers of accidents than the
insurance companies do, they are upgraded. When
renters are better informed than landowners about
the circumstances around the harvest and their
efforts, they are upgraded, [41]. According to the
principle of IT applications, at least one party to the
transaction will have more pertinent information
than the other party or parties. It is assumed that the
latter party or parties do not have the knowledge
that the other party has, [13].
The phrase "IT applications" started to catch on
in the late 1970s. Its dissemination was related to
the hypothesis put forth by Khudoykulov, et al, [31].
The later academics created a capital structure
model based on the asymmetry of information
between the management, who are knowledgeable
about the company's earnings, characteristics, and
investment prospects, and the shareholders, who are
not, [39]. Such models are predicated on the concept
that executives with inside knowledge of their
organizations have a higher incentive to share that
knowledge with outside investors to drive up the
stock prices of those organizations, [6]. However,
those managers are unable to convey positive
information because shareholders would question it,
[10].
It is simple to process a lot of data and
information using modern technology (the internet,
Extranet, and programs). As a result, IT enables a
large number of exchangers to simply, promptly,
and affordably access information in the stock
market markets, [5]. According to various research,
expenditures will be lower and information will be
transmitted more quickly when dealing with
electronic channels. The transactions and
communication procedures will proceed more
quickly when carried out in this way, [37; 42].
A solution to the problems preventing
exchangers from accessing data and conducting
transactions is an information technology (IT). Even
though financial services are complicated and
exchange markets are far away, they can be
employed to achieve this purpose. Organizational
challenges are among the issues preventing
exchanges in this area. Trading firms and
exchangers now have unfettered access to the stock
exchange marketplaces thanks to modern
technologies. It raised the intensity of competition
while lowering transaction costs. Because it
permitted exchangers to conduct trades using online
accounts, it made stock exchange market
transactions simpler, [17]. The new laws and
technologies produced a new class of investors.
They safeguarded the investors' legal rights and
gave them all the necessary information via internet
live channels. They made it simpler to share
information with exchanges and obtain it. They
made it possible for exchangers to participate in
trading activities on the stock exchange platforms.
Gaining information on the exchange procedure
costs. The liquidity of the secondary markets is
positively and considerably affected by reducing the
severity of the barriers preventing exchangers from
reaching the market, [5].
Several brokerage companies, banks, and
financial organizations that subscribe to the
clearinghouse can use it. Information regarding the
transactions made by the subscribers is submitted to
the Clearinghouse at the end of each day. It is
calculated what each subscriber's net profit is. Each
subscriber will receive a list with information on the
financial documents that need to be supplied or
filed. Each subscriber will receive information about
the total amount of money that needs to be paid or
acquired. The central clearing system's creation thus
represents the desired outcome of doing away with
the use of papers to track the behavior of stock
prices. Additionally, it can be seen in the use of
interconnected computers to record financial
activities related to profit distribution rather than
using checks, [37]. There is a need to establish
businesses for the protection of investors in the
financial markets due to the necessity of having
complementarity between exchange operations and
dealing with the problem of the delivery deficit by
brokers. When brokers are unable to protect
customer accounts that they manage, these
businesses act as semi-public entities to do so.
Through the insurance premiums, stock exchange
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Mutasim Aldabbas, Yaser Ahmad Arabyat,
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Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
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market brokers and participants pay the insurance
fees, [42].
2.2 Financial Market Efficiency
The availability of data and information about the
company whose financial papers are traded on the
financial market has a significant impact on
investment in financial papers. Thus, the availability
of such data and information represents one of the
key factors in setting the values of financial papers.
To decide whether to buy or sell something, such
facts and information must be analyzed, [15].
Therefore, the decision-making of investors while
purchasing financial documents will be strongly
impacted by the availability or lack thereof of data
and information. Any flaw in these data and
information will result in an inefficient financial
market. Therefore, having an effective financial
market means that prices react quickly and
objectively to the facts and information that
exchangers have access to Zhang, & Wei, [46].
The prices do not react quickly to the facts and
information that are available to the exchangers
when there is an inefficient financial market. It
implies that certain investors have access to data and
information that others do not. These facts and
details concern the company or companies whose
financial documents are traded on the stock market.
The other investors are unaware of them. The
quantity of profit earned by each investor in the
financial market is negatively impacted by this gap
in this regard, [30]. It compels investors who do not
think the prices are reasonable to decide against
trading in such a market. It results in a decrease in
the volume of transactions involving the exchange
of financial paperwork. It causes the number of
exchangers and the market's liquidity to decline. It
has a detrimental effect on the country in question's
rate of economic growth. It results in stock prices
that do not accurately reflect the market value of the
companies in question. It helps certain investors
achieve atypical earnings. The market's reputation
suffers as a result. Because it is viewed as an
inefficient market, it could result in the collapse of
such a market, [24].
The alignment between the prices of financial
papers, notably stocks, and the data and information
available to exchangers is a representation of what
the term "efficient financial market" means. That
holds regardless of whether the data and information
are recent, personal, or public. In other words, the
phrase "efficient financial market" refers to the
market's capacity to reflect any fresh information on
certain financial documents that have been
exchanged on the values of such papers. Concisely,
it refers to the market's capacity to determine the
cost of financial papers based on their intrinsic
value, [22]. Marketing entails allowing investors
within and outside the market to receive all
information of the same quality and quantity at the
same time while paying minimal charges. The
financial papers being traded in this relationship
must have a reasonable value. The most profitable
locations are where the available financial resources
are used most effectively in an efficient market,
[28].
The most significant issue influencing how well
the financial market performs is seen to be the
problem of (asymmetric Information). This is so
because this issue negatively influences all the
market, transactions, and overall economy.
Asymmetric information refers to one of the parties
to a transaction not knowing something. Investors
and currency exchangers can quickly get
information thanks to the efficient market. That has
an immediate impact on the market's stock exchange
values, [16]. There is no lag in time between
gathering data and arriving at conclusions about
stock value. No investor is permitted to use any data
or knowledge to obtain an abnormal return in an
efficient market. This is because prices in the
financial market must be balanced and must
fluctuate depending on the most recent information
to enter the market, [22]. Such details concern the
organizations responsible for the financial
documents being traded. A solid financial market
has a high level of liquidity and accurate data that is
accessible at the appropriate moment. This level is
determined by how long the financial documents are
sold. In other words, it is determined by how long it
takes to sell and buy such documents and convert
them to cash. The cost of transferring ownership of
the financial paper, the type of asset, the number of
exchangers, the volume of transactions, and the type
of asset all have an impact (i.e. costs of executing
transactions). It is impacted by the level of
competition and the ease with which money may be
moved between markets (such as those for stocks,
bonds, and real estate), according to Cho, and Kim,
[15].
2.3 Hypotheses Development
Dorodnykh, [19] developed the idea of IT
applications. The latter notion provided a
framework for comprehending the capture theory. It
refuted the Modigliani and Miller theory's main
tenet. This notion is known as the homogeneous
expectations hypothesis. It suggests that both the
management and the investors share the same
expectations for the future of the business. A
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Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
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competing idea known as the IT applications theory
was refuted by (the perfect market hypothesis). The
latter hypothesis assumes that all market participants
are equally knowledgeable, [27].
Burhop and Lehmann-Hasemeyer, [12] present a
more coherent and reasonable hypothesis. They
make the implication that management is more
knowledgeable than investors. Therefore, the
issuance of common stock is not in the best interest
of the current shareholders, [7]. As a result, those
with knowledge (internal users) can acquire the
skills required to use IT programs more successfully
than those who are not users and produce aberrant
returns, [2]. The financial market significantly
depends on the type of information that is traded on
the pertinent market, according to the concept's
intended meaning (the effectiveness of the financial
market). It is expected that any new information that
exchangers receive will cause the stock values to
alter swiftly.
Exchangers' perceptions of the companies
issuing the stocks will change because of this
information. The stock prices are anticipated to
behave erratically since the bits of information are
unrelated to one another and could reach the market
at any time. Stock prices increase when there is
positive news. They stumble when bad news arises
because of unexpected circumstances. Given the
predicted severe rivalry between exchangers for it,
none of them can win the race to obtain or evaluate
such information first. As a result, they will not
have the opportunity to make unusual profits at the
expense of others, [35; 25]. According to certain
researchers, there is a favourable correlation
between IT and stock exchange efficiency, [22; 28;
27]. Additionally, several researchers have explored
the connection between stock market efficiency and
stock price behaviour, [39; 41].
Zung et al., [47], observed that the adoption of
an electronic trading system at the ASE increased
trade volume, liquidity, and stock price volatility.
Similarly, Zhao et al., [48], discovered that the
deployment of IT at the ASE improved market
efficiency and liquidity. Furthermore, Zeidner and
Matthews, [49], reported that the application of data
analytics at the ASE resulted in enhanced stock
price predictions, which increased market
efficiency. According to Zeidner and Matthews
[49], the application of artificial intelligence (AI) at
the ASE resulted in better stock price predictions
and increased market efficiency. Similarly, Zhao et
al., [48], revealed that the deployment of blockchain
technology at the ASE increased transaction
transparency and security, which boosted market
efficiency. Other research has looked into the
influence of IT on stock market investor behaviour.
According to Zung et al. [47], the usage of social
media and online platforms at the ASE increased
investor engagement and decreased information
asymmetry, which boosted market efficiency.
Overall, the research implies that the use of
information technology at stock exchanges such as
the ASE improves market efficiency, liquidity, and
volatility of stock prices, as well as investor
behaviour. It is crucial to highlight, however, that
the impact of IT on efficiency is likely to be
impacted by several factors, including market
growth, legislation, and the individual IT tools and
systems that are employed.
Informed by the research of previous and
theoretical studies related to the subject of this
research, and based on the research question and its
objectives, this study is based on the following
hypotheses:
H01: There is no effect of IT in raising the
efficiency of the Amman Stock Exchange Market.
H02: There is no statistically significant relationship
between IT and the efficiency of the Amman Stock
Exchange Market mediated by the behaviour of the
stock prices.
3 Methodology
To evaluate the IT application, the study used a
descriptive-analytical technique. The firm value,
profits, and returns obtained from its financial
documents were measured to do that. The research
made use of Bagehot's hypothesis, [26]. According
to the latter idea, the stock price of the company will
be impacted by the adverse selection brought on by
having exchangers with greater financial market
understanding. As a result, there will be asymmetric
or random information. Consequently, the stock
price will be significantly influenced, [4].
Utilizing the analyst's knowledge of several
undesirable characteristics is necessary to measure
asymmetric information. Such details comprise
unique information, such as details about
(Profitability statements, dividend statements, and
bankruptcy statements, bond rating statements,
takeover statements, ownership structure statements,
and stock split or derivative statements). They
contain data about the primary attributes of the
business, such as data about (relative size, growth
opportunities, and the tangibility of the assets). The
average number of analysts covering the firm's news
and the extraordinary returns for insiders are two
examples of metrics that are unrelated to the
company or its attributes, [23]. The abnormal
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Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
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returns are calculated based on the following
equation (1), [8]:
Whereas:
- RHDPt – RLDPt = αP + βp (Rmt–Rft) + δ
SMBt + σp HMLt + εp …..(1)
- RHDPt: Return of the (HDP) portfolio
during the month (t) in the companies that
pay high dividend. The insiders are the final
buyers (sellers) of the stocks in that month.
- RHDPt: Return of the (LDP) portfolio
during the month (t) in the companies that
pay low dividend. The insiders are the final
buyers (sellers) of the stocks in that month.
- αP: Alpha coefficient value that is used for
measuring the abnormal return
- βp: Beta coefficient value that is used for
measuring the sensitivity of the company’s
return towards the market return
- Rmt: The market return during the month (t)
- Rft: The return that is free from risk
- δ: Sensitivity towards the size factor
- SMBt: Size of the portfolio.
It represents the gap between the returns of the
portfolio of the stocks of great value and the
counterpart returns of the stocks of minor value
during month (t).
- σp: Sensitivity towards the book value
towards the market value
- HMLt: The market value factor to the book
value ratio.
It represents the gap between the returns of the
portfolio of the stocks of great (book value to
market value ratio) and the counterpart returns of
the stocks of a minor (book value to market value
ratio) during the month (t).
The return of insiders based on the sale and
purchase transactions of the companies that pay
high dividends in comparison to the counterpart
transactions of the companies that pay low
dividends may be examined using the
aforementioned model. The loss in the adjusted
returns of insiders based on the risks in the firms
paying high dividends in comparison to the
companies paying low dividends shall be
represented by a coefficient, which quantifies the
abnormal returns if the HML and SMB are risk
factors. The influence of size will be greater if the
companies paying high dividends are larger than the
ones paying low dividends and the insider profit rate
in the former companies is lower. The ratio of book
value to market value follows the same logic. The
characteristics of the company are used to calculate
insiders' returns. The ensuing regression equation
(2) illustrates its effects, [44].
Rki = α + γdy DI + γbm BMi + γmv ln (MV) i + γev
EVi + γdr DRi +∑ki ….... (2)
Whereas:
- Rki = Net profit of insiders (abnormal
return of insiders) of month (t) throughout
the day (k). This day is the day in which the
transaction of the insider is carried out with
the company
- DI= the dividend yield of the company. It
equals zero in case the dividend is not paid.
It equals one in case the dividend is paid.
- BMi = the book value to the market value of
the company
- Ln (MV) I = the natural logarithm of the
company's assets. It is used for measuring
the company's size.
- EVi = the volatility of the profits in the
company
- DRi= the debt ratio in the company.
All of the companies registered on the Amman
Stock Exchange have representation from the
population in the current survey. Regarding the
sample, it consists of 24 enterprises drawn from all
of the market's industrial sectors. Based on the
volume of exchange in the year 2012, it was
selected in 2019. Data on the sample's distribution
according to the sector, capital, and date of their
market listing are shown in Table 1.
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DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
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Table 1. The sampled companies
No.
Sector
Company
Beginning Capital
Ending Capital
1.
The banking
sector
Housing Bk Trd Fin
4000
100000
2.
Capital Bank
5280
112900
3.
Jordan Ahli Bank
7500
150000
4.
Bank Of Jordan
2400
105800
5.
Cairo Amman Bank
4120
103950
6.
Bank Al Etihad
2500
75000
7.
The insurance
sector
Middle East Ins
600
2420
8.
The investment
sector
Arab Assurers
200
20000
9.
The service
sector
Arab Int Uni Ins
2700
11727
10.
Arab East Invst.
1000
10000
11.
The industrial
sector
Arab Potash Co
900
9000
12.
Jor Phosphate Mn
2800
16800
13.
Jor Steel
1500
15187
14.
Nat'l Alum Ind
360
3600
15.
Ready Mix Concrt
1755
9213
16.
Al-Quds Ready Mix
4000
5000
17.
Jor Pipes Manfact
700
7590
18.
Hotel and
tourism
investment
Al-Dawliyah H&M
750
1500
19.
Al-Rakaez
180
3845
20.
Sura
432
4553
21.
Rum Group
1008
2923
22.
Masafat Transport
354
1239
23.
The
agricultural
sector
Jor Worsted Mill
236
300
24.
Arabian Dev Co
1000
4000
4 Results and Discussion
Q.1: What is the reality of relying on IT in raising
the efficiency of the Amman Stock Exchange
Market mediated by the behaviour of the stock
prices?
The abnormal returns are the funds acquired by
the insider because he possessed a competitive
advantage in the IT industry because of his
employment with the company or knowledge of
management choices. It stands for the discrepancy
between the actual return and the anticipated return
on the financial paper. It serves as a gauge for the IT
application in the current investigation. The results
of calculating the anomalous returns of the stocks of
the sampled companies are displayed in Table 2.
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DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
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Table 2. The results of calculating the abnormal returns of the stocks of the sampled companies for the year
2012
Company
Y1
Y 2
Y 3
Y 4
Y 5
Y 6
Y 7
Y 8
Y 9
Y 10
Y11
Y12
YM
1
0.387
-0.256
-0.250
0.088
-0.023
-0.163
-0.294
-0.109
-0.012
-0.012
-0.091
0.365
-0.031
2
0.737
0.302
0.129
-0.082
-0.584
-0.491
-0.264
-0.199
-0.177
-0.042
-0.428
0.121
-0.081
3
0.680
0.411
-0.056
-0.091
-0.207
-0.252
-0.456
-0.333
-0.238
-0.075
0.285
0.039
-0.024
4
0.757
0.113
-0.303
-0.471
-0.594
-0.564
-0.238
0.165
0.294
0.109
-0.091
-0.129
-0.079
5
0.831
0.319
-0.009
-0.374
-0.566
-0.510
-0.335
-0.194
-0.027
0.121
-0.150
0.302
-0.049
6
0.389
0.066
-0.341
-0.350
-0.127
-0.094
-0.204
-0.051
-0.018
0.039
-0.027
0.411
-0.026
7
0.198
-0.168
-0.417
-0.625
-0.185
0.163
0.330
0.231
0.018
-0.129
-0.018
0.113
-0.041
8
1.019
0.737
0.369
0.060
-0.277
-0.514
-0.550
-0.555
-0.476
-0.322
0.018
0.211
-0.023
9
0.850
0.309
0.199
0.134
-0.192
-0.567
-0.589
-0.303
-0.191
-0.194
-0.476
-0.264
-0.107
10
0.887
0.542
0.194
-0.091
-0.217
-0.355
-0.351
-0.400
-0.335
-0.290
-0.169
0.191
-0.033
11
0.793
0.365
-0.043
-0.428
-0.611
-0.523
-0.430
-0.164
0.096
0.156
-0.403
0.330
-0.072
12
0.398
-0.335
-0.029
0.285
0.026
-0.209
-0.081
0.177
-0.062
-0.491
0.523
-0.550
-0.029
13
0.979
0.562
0.211
-0.091
-0.270
-0.347
-0.421
-0.503
-0.411
-0.269
-0.120
0.282
-0.033
14
0.393
-0.159
-0.264
-0.150
-0.126
-0.281
-0.212
0.282
-0.033
-0.342
-0.300
-0.017
-0.101
15
0.546
-0.502
0.191
0.268
-0.169
-0.099
-0.425
-0.017
0.350
-0.295
-0.566
0.056
-0.055
16
0.415
-0.169
-0.140
-0.532
-0.069
0.387
0.146
0.056
-0.213
-0.384
-0.404
0.562
-0.029
17
0.342
-0.403
-0.272
-0.077
-0.051
0.046
0.546
0.332
0.056
0.845
-0.042
0.159
0.123
18
0.690
0.523
0.308
-0.017
-0.159
-0.491
-0.472
-0.378
-0.350
-0.270
-0.060
-0.502
-0.098
19
0.312
-0.402
-0.042
0.051
-0.161
-0.120
-0.055
-0.246
-0.194
0.120
0.161
0.191
-0.032
20
0.512
-0.020
-0.060
-0.218
-0.342
-0.300
-0.281
-0.101
-0.021
0.085
-0.091
-0.140
-0.081
21
0.904
0.532
0.161
-0.213
-0.341
-0.566
-0.592
-0.373
-0.159
-0.029
-0.008
-0.272
-0.080
22
0.645
0.191
-0.091
0.072
-0.088
-0.404
-0.551
-0.373
-0.027
-0.020
0.017
0.308
-0.027
23
0.272
0.144
-0.008
0.217
-0.021
-0.147
-0.147
0.005
-0.255
-0.261
0.546
-0.042
0.025
24
0.420
0.131
0.017
-0.114
0.020
-0.042
-0.023
-0.172
-0.261
-0.326
0.415
0.387
0.038
Table No. 2 shows that the average abnormal
returns brought on by IT applications and their
associates are -0.04 on average. This figure
indicates an unusual loss. The market, therefore,
lacks any asymmetric information that may be
leveraged to generate positive anomalous returns.
Three out of the 24 enterprises (or 12.5%) saw
aberrant returns, it can be shown. The greatest value
of irregular returns is evident. Furthermore, the
average for Company No. 17 is 0.123. Company
No. (23) Display an abnormally positive return
(0.025). That suggests that by relying on market IT
applications, the later corporation has access to
information that the other investors do not. This
business was able to profit unusually thanks to this
possession. The returns from the other companies
are abnormally negative. That indicates that such
businesses experienced unusual losses because of
their lack of access to information that other
investors had. This lack of possession is explained
by not employing IT applications during the
intended period.
It is worth noting that this table only indicates
anomalous returns; it does not reflect the firms'
overall returns or whether they were profitable or
not. The anomalous returns are computed by
deducting the predicted returns based on market
circumstances from the company's actual results. A
negative anomalous return indicates that the actual
return was less than projected, suggesting an
exceptional loss. A positive anomalous return
indicates that the actual return exceeded the
projected return, suggesting an unexpected gain. It
also is worth noting that the sample size of only 24
businesses is tiny and may not be indicative of the
overall market. As a result, more study with a bigger
sample size is needed to corroborate these findings
and understand the particular ways in which IT
applications affect company returns. Furthermore,
the findings of this table imply that organizations
that efficiently use IT applications can obtain an
informational advantage over other investors in the
market, which may result in abnormally good
returns. Companies that do not use IT applications
efficiently, on the other hand, are likely to incur
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
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Volume 20, 2023
anomalous negative returns, suggesting that they are
missing out on information that could be used to
create positive returns.
The outcomes of the statistical study on the
effectiveness of the Amman Stock Exchange Market
are shown in Table 3. The level of significance is
0.05. The test's overall significance value was
(0.041), which is less than the cut-off of (0.05) used
to run the test.
Corporate leaders, who are more familiar with
current profitability and prospective investment
opportunities than outside investors, may also be
involved in the findings. Managers and investors are
therefore aware of this. (It is a given that managers
have access to additional information because of IT
applications.) On the other hand, managers make
decisions that are more in line with the needs of the
existing (i.e., old) shareholders in the business than
those of the new shareholders, and the older
shareholders are not always positive. That is
because, when they learn more about the company's
activities, they do not logically rebalance their
portfolio. The broad information that is accessible,
however, has an impact on the financial markets'
efficiency. As a result, the transactions for issuing
stocks are free of charge.
Table 3. The efficiency of Amman Stock Exchange
Market
Sig
Median
Z
Sector
0.032
29.3
-3.654
Banks
0.022
43.88
-3.915
Insurance
0.026
84.43
-1.654
Investment
0.088
59
-3.435
Services
0.021
23.45
-1.893
Industry
0.043
27.66
-2.821
Hotels And Tourism
0.009
77.27
-3.932
Agriculture
0.041
25.67
-2.167
Total
*Tabulated t value at the significance value of 0.05
Based on these findings, the study rejects the following
research hypotheses: H01: IT has no impact on
improving the Amman Stock Exchange Market's
efficiency. It is reasonable to assume that IT will increase
the effectiveness of the Amman Stock Exchange Market.
Possibly addressing the challenges that prevent
market management decisions and contracts from
being carried out. It is the first action taken to
address the issue of the stock market's declining
operational effectiveness. It increases the economy's
overall performance and efficiency as well as that of
the financial markets in particular. A key component
of achieving this goal understands the barriers that
prevent individuals from taking advantage of current
IT applications in stock exchange marketplaces.
They consist of harnessing the available expertise
and investing in the technical potential that is
currently available. Industrial information systems
and programs can be used to do that. It is possible
by utilizing the most recent knowledge of experts in
the fields of system development, data processing,
and delivery to exchangers. To provide the finest
services and cater to their unique demands, data
should be supplied to exchangers using the most up-
to-date technology. It needs to be given to
exchangers to advance the technologies,
communication systems, and services offered while
also effectively distributing data to all participants
in the stock exchange market.
In the stock market, the usage of technologies
such as artificial intelligence, machine learning, and
blockchain is predicted to rise. This might result in
more efficient and accurate decision-making, as
well as speedier trade processing. The automation of
several stock markets procedures, such as trading
and clearing, is also likely to increase. This might
result in better efficiency and lower expenses. The
usage of digital assets such as cryptocurrency in the
stock market may rise. This might provide new
investment possibilities as well as new regulatory
issues. Sustainable investments may expand as
public knowledge of environmental and social
concerns develops. This might result in a shift in the
sorts of investments made and the firms that are
invested in. As investors grow more cognizant of
the impact of their investments on the environment,
society, and corporate governance, ESG aspects in
stock market decisions may become increasingly
important. Financial data visualization and new
methods to engage with the stock market might be
enabled by virtual and augmented reality
technologies.
This observation is consistent with the findings of
Arashi & Rounaghi, [7]; Gaio, et al., [22]; Hu, et al.,
[28]; Abdo, et al., [1].
Q.2: Is there any statistically significant relationship
between IT and the efficiency of the Amman Stock
Exchange Market mediated by the behaviour of the
stock prices?
The outcomes of the statistical analysis for the
study's variables are shown in Table 4. (i.e. IT
application, the behaviour of the stock prices, and
the efficiency of the financial market). The level of
significance is 0.05. The regression coefficient value
is shown in the table. It suggests that the majority of
businesses have negative IT applications and stock
price behaviour. It is evident that some of the
determination coefficient (R2) values are high while
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
1137
Volume 20, 2023
Table 4. The impact of using IT applications on the behaviour of the stock prices
No.
Company
B
2
R
Calculated t value
1
Housing bk trd fin
-0.317
0.237
8.869
2
Capital bank
-1.672
0.653
11.064
3
Jordan ahli bank
-0.179
0.658
3.389
4
Bank of jordan
-0.112
0.123
7.459
5
Cairo amman bank
-0.721
0.534
9.260
6
Bank al etihad
-1.717
0.394
4.243
7
Middle east ins
-1.390
0.571
10.320
8
Arab assurers
0.703
0.712
13.585
9
Arab int uni ins
-1.323
0.274
7.604
10
Arab east invst.
-0.798
0.174
4.075
11
Arab potash co
-2.838
0.281
6.828
12
Jor phosphate mn
-0.534
0.039
7.847
13
Jor steel
-0.530
0.470
10.059
14
Nat'l alum ind
-1.859
0.350
1.524
15
Ready mix concrt
-0.317
0.028
7.378
16
Al-quds ready mix
-0.632
0.538
12.251
17
Jor pipes manfact
0.148
0.201
15.038
18
Al-dawliyah h&m
-0.632
0.538
11.023
19
Al-rakaez
-0.317
0.032
9.827
20
Sura
-0.487
0.344
1.053
21
Rum group
2.320
0.505
6.578
22
Masafat transport
-1.132
0.197
7.278
23
Jor worsted mill
1.014
0.92
20.425
24
Arabian dev co
1.146
0.780
16.182
*Tabulated t value at the significance value of 0.05
the majority have intermediate values. This
indicates that the majority of variations in stock
price behaviour across the majority of corporations
may be ascribed to the way IT applications are used.
Table 4 shows that the impact factor values are
strong and favourable in the companies listed (8, 21,
23 and 24). The latter values are, respectively,
0.703, 2.33, 1.014, and 1.146. The values of the
determination coefficients are, in order, 71.2, 50.5,
92, and 78%. As a result, most businesses did not
experience abnormal returns, which serve as a gauge
for the use of IT applications. The anticipated return
exceeds the profit realized from the company's
stocks. It was discovered that there is a statistically
significant relationship, mediated by the actions of
the stock prices, between using IT applications and
the effectiveness of the Amman Stock Exchange.
Furthermore, the high determination coefficients
and significant and favourable impact factor values
indicate that the usage of IT applications in these
organizations has a good influence on their financial
performance. The high determination coefficients
also show that the employment of IT applications
can explain a considerable percentage of the
fluctuation in the efficacy of the Amman Stock
Exchange. It should be noted that these findings are
based on a specific sample of Amman Stock
Exchange firms and may not apply to other
companies or stock exchanges. More study is
needed to validate these findings and understand the
particular manner in which IT applications affect the
functioning of the Amman Stock Exchange. Overall,
the findings of this table indicate that the usage of
IT applications in firms listed on the Amman Stock
Exchange has a favourable influence on their
financial success as well as the stock exchange's
overall efficacy. It should be noted that these
findings are based on a specific sample of Amman
Stock Exchange firms and may not apply to other
companies or stock exchanges.
The findings of the statistical analysis for the
relationship between IT and the effectiveness of the
Amman Stock Exchange Market, as mediated by the
behavior of the stock prices, are presented in Table
5. The level of significance is 0.05. The significance
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DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
1138
Volume 20, 2023
test's overall value was (0.032), which is less than
(0.05).
Based on these findings, the study rejects the
following research hypotheses: H02: The
effectiveness of the Amman Stock Exchange
Market, as mediated by stock price behaviour, is not
statistically associated with IT. As a result, it is
reasonable to argue that there is a statistically
significant relationship between IT and the
effectiveness of the Amman Stock Exchange
Market, which is mediated through the movement of
stock prices.
Table 5. The relationship between IT and the
efficiency mediated by the behaviour of the stock
prices
B
2
R
t value
Sig
Constant
-0.517
5.661
0.000
Overall
Companies
-0.579
0.381
8.564
0.032
*Tabulated t value at the significance value of 0.05
The findings could also be highlighted because they
prevent losses in sales operations. This is because,
to full execution of the decision and movement of
stock prices, the central control finding validates the
existence of financial documents and credit before
transferring the selling decision to the electronic
exchange system. This revelation also eliminates
any possibility of inaccuracy in exchange
procedures. Using the internet can reduce the time
and movement of stock prices by eliminating the
need to go to the stock exchange market or
brokerage firms. Instead of visiting this market or
similar establishments, one can do exchange
operation transactions through the most advanced
exchange platforms. Consider how easily the
clearance, portfolios, financial status, and
purchasing power may be determined. Use might
make it easier to swiftly and immediately upload the
order. It makes it possible to find the clearing on the
same day. Customers who want to enter multiple
orders at once may find that using an assist executes
the purchase and sale orders very quickly. This is
due to some clients who swap many things and
demand many simultaneous transactions. Perhaps
this will make it simpler for people to participate in
the movement of stock values on the Amman Stock
Exchange. It connects domestic and international
investors with market players in Jordan. Opening
the possibility of trading on the Amman Stock
Exchange, it offers traders a range of options for
stock price movement. Customers and subscribers
trust the market to meet their demands by providing
them with information about the movement of stock
prices on exchange instruments, which is a final but
crucial point.
The stock market's usage of technology, such as
artificial intelligence and machine learning, is
projected to develop further. This might result in
more efficient and accurate decision-making, as
well as speedier trade processing. The automation of
several stock markets procedures, such as trading
and clearing, is also likely to increase. This might
result in better efficiency and lower expenses.
Mostly with the advancement of technology and
automation, the stock market may become more
transparent. This might result in better-informed
investors and more efficient securities pricing. With
the expanding use of technology and automation,
the stock market may face additional regulation.
This might result in stronger monitoring and
investor protection. The stock market is predicted to
grow increasingly global as the globe gets more
linked. This might lead to more investment
possibilities as well as increasing competition.
This observation is consistent with the findings
of Nguyen, Bui, & Pham, [39]; Ramezanian,
Pejmanfar, & Ebrahimi, [41]; Arashi, & Rounaghi,
[7]; Adenomon, Maijama'a, & John, [2]; Al-Qudah,
et al., [3].
5 Conclusion
According to the findings of this study, businesses
use information technology to increase the
effectiveness of the Amman Stock Exchange
through the behaviour of stock prices. As was
already mentioned, there is broad agreement in the
literature that IT gives firms numerous chances to
design their efficiency of the Amman Stock
Exchange and the Behaviour of the Stock Prices.
However, previous research focuses mostly on one
or a small number of the options offered by IT. The
findings of these studies are unquestionably
extremely reliable, but it would also be beneficial to
consider IT in a broader context and pay close
attention to how IT might increase the effectiveness
of the Amman Stock Exchange.
The results of this study show that, among the
24 companies listed on the Amman Stock Exchange,
Information Technology has had a major negative
impact on Amman Stock Exchange efficiency. To
improve the operational efficiency of such markets,
the report advises expanding the use of IT in
emerging stock markets, including the Amman
Stock Exchange. Moreover, expanding Amman
Stock Exchange's online exchange activities.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
1139
Volume 20, 2023
Deterring insiders from gathering knowledge
exclusively and using it to generate excessive gains
at the detriment of outside investors. This can be
accomplished by using a strategy based on openness
and transparency. However, encourages academics
to concentrate on theoretical and empirical elements
of asymmetric knowledge and how it affects
financial decisions. There is a need to perform
additional research on these issues.
Subsequently, the first limitation of this study is
that it does not deal with big data and artificial
intelligence. In addition, the sample size for this
analysis was limited to some companies, as it was
the only case that matched the study period.
Therefore, this study is exploratory and does not
attempt to demonstrate causal relationships between
parameters. News anomalous returns are used for
this study, either as a measure of market efficiency
or data on stock market efficiency and stock price
movements, but with well-documented limitations.
Other notes: This study was conducted in 2020. This
survey is based on 2019 data. In contrast, this study
examines how certain key company-level issues are
affecting the market. All of these questions need
more thorough consideration.
To ensure the efficiency of the Jordanian market
exchange, The paper also makes the case for
increased Amman Stock Exchange efficiency to
uphold efficiency and principles in Jordan,
particularly the principle of efficiency and
behaviour of stock prices, and to make sure that
these principles are put into practice in both private
and public businesses rather than just being adopted
in theory. Future research will be fascinating when
it examines the effectiveness of the stock exchange
Additionally, it is important to look into the Middle
Eastern nations to see if their outcomes are like
Jordan's or distinct from it, as well as to identify any
overlaps, discrepancies, points of compatibility, and
areas of conflict.
Acknowledgement:
It is an optional section where the authors may write
a short text on what should be acknowledged
regarding their manuscript.
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
- Yaser Ahmad Arabyat, Mutasim Aldabbas and
Mohammad Zakaria Alqudah Conducted the
Simulation, Original Writing and Optimization.
- Ghaith Abu Alfalayeh and Taha Barakat
AlShawawreh Has Implemented Statistical
Analysis.
- Mohammad Zakaria Alqudah has organized and
executed the Experiments of Section 4.
- Yaser Ahmad Arabyat was Responsible for the
Conclusion.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
No funding was received for conducting this study.
Conflict of Interest
The authors have no conflict of interest to declare.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
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WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.101
Mutasim Aldabbas, Yaser Ahmad Arabyat,
Taha Barakat Al-Shawawreh,
Ghaith Abu Alfalayeh, Mohammad Zakaria Alqudah
E-ISSN: 2224-2899
1143
Volume 20, 2023