The Impact of Political Stability on the Value Traded at Amman Stock Exchange

Abstract

This study mainly aimed to investigate the impact of political stability, money supply, and foreign indirect investment on the volume of trade in Amman Stock Exchange during the period (1996-2020) using annual data, where the main hypothesis of the study is that there is no significant impact of political stability on volume of trade in Amman Stock Exchange. To achieve this goal, both descriptive and econometrical approaches were utilized. Based on the results of those tests and due to the stationarity of the data at the level and the presence of co-integration, the long-term relationship was estimated using the Fully Modified OLS and Canonical Cointegrating Regression Method were applied. All the variables except political stability were taken as a percentage of nominal GDP.

The results of the study showed that there is a positive and statistically significant impact of political stability, money supply and foreign indirect investment on the volume of trade in Amman Stock Exchange.