Role of Financial Institutions in Making the Capital Formation in Jordan for the Period 1978–2010

Abstract

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. As the least squares method has been used through the three stages to estimate the simultaneous equations. The results confirmed the importance of the banking sector and the stock market in influencing the levels of investment in Jordan.