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The Moderating Role of Liquidity in the Relationship between the Expenditures and Financial Performance of SMEs: Evidence from Jordan

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Airout, Rana M., Alawaqleh, Qasim A., Almasria, Nashat A., Alduais, Fahd, Alawaqleh, Sonia Q.·2023·Economies
DOI 10.3390/economies11040121
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Abstract

The current paper aims to investigate the moderating role of liquidity in the relationship between accounting and advertising expenditures and the financial performance of small and medium enterprises (SMEs) in Jordan. Furthermore, the present paper highlights the importance of managing expenditures and improving financial performance. Since the performance of Jordanian SMEs is extremely critical, furthermore, the present paper explores the possibility of empowering these businesses in order to achieve profitability. This paper is based on descriptive statistics, regression, and correlation analysis in order to analyze the data, collecting secondary data from 200 SMEs. The results demonstrate that accounting expenditures are key factors for financial performance, especially in SMEs. Moreover, SMEs are more sensitive to liquidity challenges, which significantly impact their short-term expenditure and consequently influence their financial performance. It is evident that accounting expenditures moderated by liquidity have a positive effect on the financial performance of SMEs. However, our findings indicate a negative effect regarding the relationship between advertising expenditures and financial performance. According to the results of this study, regulators may offer new regulations and legislation in the future to the Ministry of Finance and the Amman Stock Exchange.

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Metadata

Authors
Airout, R. M., Alawaqleh, Q. A., Almasria, N. A., Alduais, F., & Alawaqleh, S. Q.
Affiliations
  • Philadelphia University (JO)
  • Independent Researcher, Amman 19392, Jordan
Corresponding author
  • Airout, Rana M.
  • Alduais, Fahd
ORCID
Venue
Economies
Publisher
MDPI AG
Published
2023-04-17
Volume
11
Issue
4
Pages
121
ISSN
2227-7099 (ISSN-L)
DOI
10.3390/economies11040121
OpenAlex
W4366087981
Cited by
27
References
3
Citations by year
2026: 11 · 2025: 6 · 2024: 7 · 2023: 3
FWCI
15.73
Type
journal article
Language
en
Open access
Licence
Locations
  • Economies (publishedVersion, cc-by)
  • Econstor (Econstor) (submittedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
  • DOAJ (DOAJ: Directory of Open Access Journals) (submittedVersion, cc-by-sa)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy and Behavior
Keywords
liquidity, advertising expenditure, financial performance, small and medium-sized enterprises, moderating effect, Jordanian SMEs

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Airout, R. M., Alawaqleh, Q. A., Almasria, N. A., Alduais, F., & Alawaqleh, S. Q. (2023). The Moderating Role of Liquidity in the Relationship between the Expenditures and Financial Performance of SMEs: Evidence from Jordan. Economies. https://doi.org/10.3390/economies11040121