Profitability of the Jordan Banking Sector: Panel Evidence on Bank Specific and Macroeconomics Determinants

ABSTRACT: In this study, we analyzed the relationship between the profitability of banks and macroeconomic factors in Jordan banking sector considering 7 banks within the period 7 years from 2005 until 2011. In this case, we used a panel data to investigate that relationship. We found out the bank specific factors have more impact to the profitability of banks in Jordan as compared with the macroeconomic factors. With respect to the results inflation rate turned out to be insignificant. We concluded by recommending some possible solutions to the problems we came across in this study. Keywords: Bank profitability, panel data, Jordan. ……………………………………………………………………………………………………………………………………………………………………………………………………………………