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

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.

Issue Date:
Jul 27 2010
Publication Type:
Journal Article
DOI and Other Identifiers:
ISSN 1804-1205 (Print) ISSN 1804-5006 (Online) (Other)
Record Identifier:
PURL Identifier:
Published in:
Business and Economic Horizons (BEH)
Volume 02
Issue 2
Page range:
Total Pages:
JEL Codes:

 Record created 2017-04-01, last modified 2018-01-22

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