The Impact of the Fluctuations in the Global Prices of Crude Oil and the Global Financial Crisis in the Profitability of Jordanian Transportation Sector’s Companies

The study aims to test the effect of fluctuation in international oil prices on the profitability of transport sector companies listed on the Amman Stock Exchange. This is in addition to testing the impact of the global financial crisis on the profitability of the sector companies. Through the use of the E-Views analysis program, the study intended to analyze a sample of six companies during the period between January 2002 and December 2017. Accordingly, the results of the analysis indicate that the data of the companies in the study sample had become stable only when tested on the basis of adding the first time difference. The results of the Johansen Test and the Vector Error Correction Model indicate that there is a long-term relationship between oil prices, the global financial crisis, and the profitability of the sector companies. As for the results of the Waldχ ^ 2 Test, they indicate that there is no short-term relationship between oil prices, the global financial crisis and the profitability of the sector companies, as it is represented by the rate of return on assets, the rate of return on equity, and the profit margin ratio. In addition to the above, the study recommends the necessity of finding a distinguished cadre of financial and economic analysts with the aim of forecasting global oil prices and entering into future contracts that could help the sector companies hedge against the risks of global oil price fluctuations.