Abstract
This study aims to analyze the role played by financial institutions to influence the levels of investment inJordan for the period 1978 to 2010, through the study of the role of each of the banking sector and stock market,this study used the equilibrium model that takes into account both the supply and demand to achieve theobjectives of the study. As the least squares method has been used through the three stages to estimate thesimultaneous equations. The results confirmed the importance of the banking sector and the stock market ininfluencing the levels of investment in Jordan.
Highlights
Theoretical FrameworkJordan has witnessed during the past four decades a great development in various economic fields
The purpose of the study (Soufan, 2008) is to study the source of economic growth in Jordan and whether the growth has been expanded by increasing the amount of input factors of production or growth depending on intensive growth
This study aims to analyze the role played by financial institutions to influence the levels of investment in Jordan for the period 1978 to 2010, through the study of the role of each of the banking sector and stock market, this study used the equilibrium model that takes into account both the supply and demand to achieve the objectives of the study
Summary
Jordan has witnessed during the past four decades a great development in various economic fields. Businessmen are usually those with the talents and experience in the investment and focus on investment in projects with high productivity while savers may invest their money in productive projects Those who study the literature of financial and banking can see very clearly the privacy enjoyed by the intermediary financial institutions, where the highlight of this Privacy debut in the role to be played by banks in the development of solutions to the problem of asymmetric information through its ability to provide information needed by investors in the ability to distinguish between good credit risks and non-good, where you can get money from depositors and lending institutions and the collection of larger profits, allowing them to engage in the activity of providing information. The flexibility of banks to lend institutions are affected by one of the most important factors that give the banks their privacy where we can see that in the absence of the organization’s ability to pay and breach of contracts with the bank, there for the banks’ ability to restructure the credit contracts, and the restructuring of contracts, made banks work to reduce the financial cost of the failure of institutions unlike other lenders who lack this ability, flexibility, and forcing institutions to bankruptcy
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