Cash gap in improving firm performance and value: A corporate strategy study
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Amneh Hamad 
, Amneh Alkurdi, Majd Iskandrani , Ali Alhadidi, Ghaleb Abu Rumman
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This research gauges the influence of the cash gap (CG) on firms’ performance and value for Jordanian industrial firms listed in the Amman Stock Exchange (ASE) during the period (2010–2019). By applying a panel data analysis on a sample of 39 firms, the study used the CG as the main independent variable. However, for dependent variables, the research focused on two measures of companies’ performance, which are operating profit margin (OPM) and return on assets (ROA). By employing Tobin’s Q (TQ) as a proxy for firm value (FV), the research reveals that there is a significant and inverse linkage between CG and both OPM and ROA. These results align with previous studies conducted by Kouaib and Bu Haya (2024) and Ruguru (2023). The results also revealed that reducing the CG and debt ratio, while increasing volume, financial assets ratio, and sales growth, improves company performance. Moreover, based on the Arellano-Bond estimation results, the research notes a significant and inverse nexus between the CG and FV. The results of this research suggest fruitful insights for decision-makers, executive managers, and debt holders, contributing to their financing and investing activities.
Keywords: Cash Gap, Firms’ Performance, Firms’ Value, Amman Stock Exchange
Authors’ individual contribution: Conceptualization — A.H. and M.I.; Methodology — A.H., A.A.K., A.A.H., and G.A.R.; Investigation — A.H., A.A.K., M.I., and A.A.H.; Resources — A.H. and M.I.; Writing — Original Draft — A.H. and M.I.; Writing — Review & Editing— A.H. and M.I.; Supervision — A.A.H. and G.A.R.; Funding Acquisition — A.H. and M.I.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G12, G33, G320
Received: 13.02.2025
Revised: 19.05.2025; 09.07.2025; 11.12.2025
Accepted: 30.12.2025
Published online: 05.01.2026
How to cite this paper: Hamad, A., Alkurdi, A., Iskandrani, M., Alhadidi, A., & Abu Rumman, G. (2026). Cash gap in improving firm performance and value: A corporate strategy study. Corporate and Business Strategy Review, 7(1), 32–42. https://doi.org/10.22495/cbsrv7i1art3
