The Determinants of Capital Adequacy in the Jordanian Banking Sector: An Autoregressive Distributed Lag-Bound Testing Approach

The current study aims to examine the determinants of capital adequacy ratio (CAR) in context Jordanian banks through a literature review and analysis empirical evidence. aggregate data were obtained from Globaleconomy.com, Financial Soundness Indicators, Central Bank Jordan, World Data covering period 2003 2021. analyzed using autoregressive distributed lag (ARDL), utilizing Econometric Views (EViews) software. results suggest short-run causality relationship running banks’ credit-to-deposits ratio, leverage liquidity one-year-lagged ROE CAR. also existence capital-to-assets capital-to-asset liquid-assets-to-deposits coverage In addition, show as having positive long-run associations with A significant association was found between CAR, on one hand, liquid assets deposits ratio; other showed negative statistically pairwise Granger test reveal that asset deposits, money supply, profitability, cause findings emphasize importance understanding factors impacting direction influence, magnitude influence CAR emerging economies such Jordan taking appropriate measures safeguard stability resilience banking industry.