Role of Investment Funds in Economic Growth )Case Study of Jordanian Hajj Fund for Savings and Investment)

Abstract

As a case study of the Jordanian Hajj Fund for Savings and Investment, this study aims to clarify the role of investment funds by investigating their role in long-term and short-term investment activities for economic growth in Jordan. This study was based on data collected from available annual reports of the Fund for the period of (2013–2021) and the Department of Statistics for information on GDP growth as a representative of economic growth and EViews. The statistical analysis showed the positive and statistically significant effect of the total investment activities (long-term and short-term) of the Fund on economic growth. In addition, the analysis demonstrated the positive and statistically significant effects of the long-term investment and short-term investment activities of the Fund on economic growth. However, the effect of the long-term investment activities of the Fund on economic growth was stronger than that of its short-term investment activities, because long-term investment activities directly affect economic growth. The analysis also revealed the positive and statistically significant relationship between the lagging economic growth (GGDP-2) and economic growth in the current year and negative relationship between the unemployment rate and economic growth. Results promote the establishment of investment funds, especially those operating according to modern Islamic financing tools, owing to their ability to attract savings from small savers, thereby contributing to economic growth in the country. The most important recommendation of this study involves long-term investment, owing to its considerable impact on economic growth. Increased investment funds should be established to attract savings to contribute to economic growth and benefit from the experiences of leading countries in this field.