The Impact of Fluctuations in Foreign Exchange Rates on Financial Performance: An Applied Study on the Industrial and Service Companies Listed on the Palestine Exchange During 2014-2019

Abstract

The Foreign exchange rate or the FX is usually defined as the price at which a currency pair is converted, where it plays an important role in the international trade, economic performance, and balances of payment (Lagat & Nyandema, 2016). This paper aimed to find out the effect of fluctuations in foreign exchange rates (JOD and EUR against the NIS) on the financial performance represented by economic value added (EVA), return on assets (ROA), share price, (SP) and Earning per Share (EPS) for industrial and service companies listed on the Palestine Stock Exchange, during (24) extended quarters (From 2014 to 2019). The study sample included (14) companies, of which (9) were industrial companies, and (4) service companies. To achieve the objective of the study, the quantitative analysis approach based on reference to sectional time series data (Panel Data) was used.

Keywords: fluctuations in foreign exchange rates, financial performance, industrial and service companies listed on the Palestine Exchange.

DOI: 10.7176/RJFA/14-17-02

Publication date:September 30^th 2023