The relationships between stock market capitalization rate and interest rate: Evidence from Jordan

• Authors: Husni Ali Khrawish , Walid Zakaria Siam , Mohammad Jaradat
• Languages of publication: EN

Abstracts

EN

The paper examines the effect of interest rates on the stock market capitalization rate in Amman Stock Exchange (ASE) over the period of (1999-2008). It is used the OLS regression method, multiple linear regression model and simple regression model. The time series analysis revealed that there are significant and positive relationship between government Prevailing interest rate (R) and stock market capitalization rate (S). The study shows that Government development stock rate (D) exerts negative influence on stock market capitalization rate (S), also it finds a significant and negative relationship between government Prevailing interest rate (R) and Government development stock rate (D). Finally, this study suggested the importance of government intervention to encourage investment in ASE by reducing rate of personal taxation thus, granting incentive for creation of wealth, control interest rate so as to aid the growth of the stock market and improving the regulatory environment and decreasing red tape.

Keywords

EN

stock market capitalization rate; prevailing interest rate; government development stock rate

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2010
• Volume: 2
• Issue: 2
• Pages: 60-66

Contributors

author

Husni Ali Khrawish

author

Walid Zakaria Siam

author

Mohammad Jaradat

• Prague Development Center s.r.o., Bořivojova 1081 / 40, 130 00, Prague 3 - Žižkov, Czech Republic