The Impact of the Performance of Amman Stock Exchange on Economic Growth in Jordan: An Econometric study

Authors

Rawan Al-Omari, Yarmouk University - JordanFollow
Ahmad Malawi, Yarmouk University - JordanFollow

DOI

https://doi.org/10.35192/jjoas-h.v23i2.4

Abstract

This study aimed to investigate the impact of the Amman Stock Market's performance on economic growth in Jordan during the period from 1978 to 2016. Several diagnostic tests were used, such as the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests for stationarity. The results show that the variables are not stationary at their levels, while their first differences are stationary. The CUSUM of squares test was employed to check the stability of the model parameters, and the Johansen test was used for cointegration. Dynamic Least Squares (DOLS) was used for regression analysis. Overall, the results indicate that the turnover ratio and the volume of trade have a negative impact on economic growth, while the stock price index has a positive impact on economic growth. Based on the findings, the study recommends promoting the efficiency of stock markets in Jordan to enhance economic growth rates and encourage foreign direct investment by reducing taxes on these investments. Additionally, the study suggests creating strategies that enable stock markets to regulate corporations effectively.

Recommended Citation

Al-Omari, Rawan and Malawi, Ahmad (2020) "The Impact of the Performance of Amman Stock Exchange on Economic Growth in Jordan: An Econometric study," Jordan Journal of Applied Science-Humanities Series: Vol. 23: Iss. 2, Article 4.
DOI: https://doi.org/10.35192/jjoas-h.v23i2.4
Available at: https://digitalcommons.aaru.edu.jo/jjoas-h/vol23/iss2/4