Effect of Information and Communication Technology Investment on the Profitability of the Jordanian Commercial Banks

Abstract

The objective of this research paper is to evaluate the effect of investment in information and communication technologies on the profitability and performance of the Jordanian commercial banks, whether it helps to improve sales or it helps to reduce the overall operating expenses. To arrive at this objective, the researchers used Cobb-Douglas production function as a proxy to measure these effects. The researchers used two measures of profit: ROA and ROE as dependent variables for this purpose, depending on the annual reports of the sample Jordanian commercial banks as a source for the raw data that was used in the analysis for the period between 2006 to 2013. SPSS  was used as a statistical tool for the arrangement of data and mutable regression  was used as a statistical tool for the analysis. From the analysis of the study, the following conclusion was reached: there is a positive effect of investment in information and technologies on the profitability and performance of the sample Jordanian commercial banks used in this research.

Keywords: Information and communication technology, Investment, Profitability, Commercial banks, Jordan.