Foreign trade as a strategic driver of corporate financial performance: Evidence from an emerging market

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Abstract

This study investigates the strategic impact of foreign trade on corporate financial performance in Jordan, a small, open, emerging economy. Using annual time-series data covering 2005–2021, the analysis integrates national trade indicators (exports, imports, and trade openness) obtained from the Jordan Department of Statistics with aggregated firm-level financial data for companies listed on the Amman Stock Exchange (ASE). Corporate financial performance is measured by the average return on assets (ROA) across listed firms. The autoregressive distributed lag (ARDL) approach is employed to examine both short-run dynamics and long-run equilibrium relationships. The findings confirm the existence of a stable long-term association between foreign trade variables and corporate financial performance. Exports and trade openness exert positive and statistically significant effects in both the short and long run, indicating that international market integration enhances firm profitability and strategic competitiveness. Conversely, imports demonstrate a negative and significant impact, suggesting that import penetration may intensify competitive pressures and reduce domestic firms’ margins. These results provide strategic insights for policymakers and corporate leaders seeking to strengthen export capacity, enhance productive competitiveness, and mitigate risks associated with import dependency.

Keywords: Foreign Trade, Exports, Imports, Trade Openness, Financial Performance, ARDL

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: F14, F43, G32, L25

Received: 30.07.2025
Revised: 04.11.2025; 14.02.2026; 16.04.2026
Accepted: 28.04.2026
Published online: 01.05.2026

How to cite this paper: Alawneh, A. M. A. (2026). Foreign trade as a strategic driver of corporate financial performance: Evidence from an emerging market. Corporate and Business Strategy Review, 7(2), 217–226. https://doi.org/10.22495/cbsrv7i2art20