Dynamic interactions among the industrial sector and its determinants in Jordan

The industrial sector is one of the most vital sectors in the national economy, so different local and global factors affect its performance. The study examines the impact of the global and local macroeconomic variables on the industrial index of the Amman Stock Exchange. This study covered the peri...

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Main Authors: Nawaf Abuoliem, Safwan Mohd Nor, Muhamad Safiih Lola, Ali Matar
Format: Article
Language:English
Published: LLC "CPC "Business Perspectives" 2019-12-01
Series:Investment Management & Financial Innovations
Subjects:
ARD
Online Access:https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12913/IMFI_2019_04_Abuoliem.pdf
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spelling doaj-66c4700407864cb68aa0b5c4c20b90c12020-11-25T03:17:33ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations 1810-49671812-93582019-12-0116432534110.21511/imfi.16(4).2019.2812913Dynamic interactions among the industrial sector and its determinants in JordanNawaf Abuoliem0Safwan Mohd Nor1https://orcid.org/0000-0003-0791-2363Muhamad Safiih Lola2https://orcid.org/0000-0001-9287-7317Ali Matar3https://orcid.org/0000-0003-0599-5855Ph.D. Candidate, Faculty of Business, Economics and Social Development, University of Malaysia TerengganuPh.D., MMIM, RFP, RHB Islamic Endowed Scholar in Finance, Associate Professor, Faculty of Business, Economics and Social Development, University of Malaysia Terengganu, Malaysia; Research Associate, Victoria Institute of Strategic Economic Studies, Victoria UniversityPh.D., Associate Professor, Faculty of Ocean Engineering, Technology and Informatics, University of Malaysia TerengganuPh.D., Associate Professor, Finance and Banking Department, Jadara UniversityThe industrial sector is one of the most vital sectors in the national economy, so different local and global factors affect its performance. The study examines the impact of the global and local macroeconomic variables on the industrial index of the Amman Stock Exchange. This study covered the period from January 2007 to December 2016, which is considered as a crucial period in the Middle Eastern countries. This period encompasses the worldwide economic meltdown from 2007 to 2008, the Arab spring of 2010 and the wars in Syria and Iraq from 2012 to 2014. The macroeconomic variables used in this study as domestic variables from Jordan were the deposit interest rate (IN), inflation rate (INF), money supply 2 (MS2), trade balance (TR), producer price index (PPI) and the industrial production index (IPI). At the same time the global oil price (WTI) was used as a global factor to measure the external shocks. This study used the ARDL bound testing approach to examine the co-integration, short-run and long-run relationships. Moreover, Granger causality test was used to detect the causality relationship in the short and long run between the selected macroeconomic indicators and the industrial index. It was found out that the inflation rate positively influenced the industrial index, which provides some evidence that the industrial sector in Jordan acts as a hedge against inflation. In addition, the global oil price showed a significant negative impact on the industrial sector. Some important implications for investors, government bodies, and policymakers are discussed.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12913/IMFI_2019_04_Abuoliem.pdfARDcrude oil priceinflationmacroeconomic indicatorsstock price
collection DOAJ
language English
format Article
sources DOAJ
author Nawaf Abuoliem
Safwan Mohd Nor
Muhamad Safiih Lola
Ali Matar
spellingShingle Nawaf Abuoliem
Safwan Mohd Nor
Muhamad Safiih Lola
Ali Matar
Dynamic interactions among the industrial sector and its determinants in Jordan
Investment Management & Financial Innovations
ARD
crude oil price
inflation
macroeconomic indicators
stock price
author_facet Nawaf Abuoliem
Safwan Mohd Nor
Muhamad Safiih Lola
Ali Matar
author_sort Nawaf Abuoliem
title Dynamic interactions among the industrial sector and its determinants in Jordan
title_short Dynamic interactions among the industrial sector and its determinants in Jordan
title_full Dynamic interactions among the industrial sector and its determinants in Jordan
title_fullStr Dynamic interactions among the industrial sector and its determinants in Jordan
title_full_unstemmed Dynamic interactions among the industrial sector and its determinants in Jordan
title_sort dynamic interactions among the industrial sector and its determinants in jordan
publisher LLC "CPC "Business Perspectives"
series Investment Management & Financial Innovations
issn 1810-4967
1812-9358
publishDate 2019-12-01
description The industrial sector is one of the most vital sectors in the national economy, so different local and global factors affect its performance. The study examines the impact of the global and local macroeconomic variables on the industrial index of the Amman Stock Exchange. This study covered the period from January 2007 to December 2016, which is considered as a crucial period in the Middle Eastern countries. This period encompasses the worldwide economic meltdown from 2007 to 2008, the Arab spring of 2010 and the wars in Syria and Iraq from 2012 to 2014. The macroeconomic variables used in this study as domestic variables from Jordan were the deposit interest rate (IN), inflation rate (INF), money supply 2 (MS2), trade balance (TR), producer price index (PPI) and the industrial production index (IPI). At the same time the global oil price (WTI) was used as a global factor to measure the external shocks. This study used the ARDL bound testing approach to examine the co-integration, short-run and long-run relationships. Moreover, Granger causality test was used to detect the causality relationship in the short and long run between the selected macroeconomic indicators and the industrial index. It was found out that the inflation rate positively influenced the industrial index, which provides some evidence that the industrial sector in Jordan acts as a hedge against inflation. In addition, the global oil price showed a significant negative impact on the industrial sector. Some important implications for investors, government bodies, and policymakers are discussed.
topic ARD
crude oil price
inflation
macroeconomic indicators
stock price
url https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12913/IMFI_2019_04_Abuoliem.pdf
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AT muhamadsafiihlola dynamicinteractionsamongtheindustrialsectoranditsdeterminantsinjordan
AT alimatar dynamicinteractionsamongtheindustrialsectoranditsdeterminantsinjordan
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