Abstract
The study aimed to show the impact of macroeconomic variables (inflation rate, market interest rate) on returns of Palestine Stock Exchange Indices (Al-Quds index, Investment sector index, Insurance sector index, Banks sector index, Services sector index, Industry sector index). The Auto- Regressive Distributed Lag Model (ARDL) has been applied in the study during the period 2008-2018. The results of the study have shown that inflation has left a negative impact on the returns of Palestine Stock Exchange Indices (Al-Quds index, Investment sector index, Insurance sector index, Banks sector index, Services sector index, Industry sector index) and there are a co-integration and long-run relationship between inflation and the returns of Palestine Stock Exchange Indices during 2008-2018. The study also has shown that the market interest rate has a negative impact on the returns of Palestine Stock Exchange Indices. The study recommended that the governmental bodies in Palestine should follow a clear economic policy, exploit all the tools of fiscal and monetary policy in order to reduce inflation rates in Palestine and leave a positive effect on stock returns to stimulate the indirect investment within Palestine Stock Exchange.
Recommended Citation
El Najjar, Jameel
(2021)
"The Impact of Macroeconomic Variables on Stock Market Returns: Evidence from Palestine,"
An-Najah University Journal for Research - B (Humanities): Vol. 36:
Iss.
1, Article 2.
Available at:
https://digitalcommons.aaru.edu.jo/anujr_b/vol36/iss1/2