ANALYSIS of THE RELATIONSHIP BETWEEN ECONOMIC FORCES and ABNORMAL STOCK RETURN EMPIRICAL EVIDENCE - Polish Journal of Management Studies

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ANALYSIS of THE RELATIONSHIP BETWEEN ECONOMIC FORCES and ABNORMAL STOCK RETURN EMPIRICAL EVIDENCE

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ANALYSIS OF THE RELATIONSHIP BETWEEN ECONOMIC FORCES AND ABNORMAL STOCK RETURN: EMPIRICAL EVIDENCE
AL- Shubiri F.N.

Abstract: Financial markets plays a vital role in the Jordanian economy organizes its operations in a changing environment, which is working on the transfer of local resources through productive channels next to foreign investment. The goal of this study is to analysis the relationship between economic variables and abnormal returns in Amman stock exchange.  This paper used the data of variables such as 50 industrial firms with the period from 2004 to 2012. The results indicate  that the, consumer price index , gross fixed capital formation and money supply on index abnormal stock returns is statistically significant and no significant industrial production index  and money market interest rate Index and Abnormal returns.  The researcher recommends attention to economic variables of the fiscal and monetary policy in the Jordanian economy, which is characterized as a fast-growing so that must be the continuous analysis of market factors and determine the impact on abnormal returns for the shares of companies which strengthens the competitive position of companies in the market.

Key words:
Economic Forces, Abnormal Stock Return, Stock Market; Emerging Markets (Jordan)

Introduction

The interest rate and the stock prices affect of operations of the money supply in the financial market, which may contribute to the effect on economic variables as he tries to investors maximize market value for them in financial market have an efficient in light provide all the information they have but a lot of researchers proved the inefficiency of the Jordanian market and so investors are constantly trying to get abnormal returns under certain circumstances allow it [5].
[1] and [15] pointed where the information could benefit the investor in the financial markets be internal, but this information may not be available to everyone note that if the information is available to everyone there is no active market in the sense of buyers and sellers that vary between information. The movement of stock in the market is constantly changing as a result of various factors, where express movement and flow of money and that reflect the growth of the economy, which could explain the evolution of the growth of corporate assets and dealing with global threats in an easier and a diversified portfolio of investments. The  growth in the stock market depend on evolution of the economy in the country and with the growth cycle of savings and then begin the allocation of resources and investment and in this way preserve corporate liquidity ratio and cash ratio balanced position to face the risks surrounding the projects The response of the market returns are a result of economic variables, which vary from one country to another where the affect external variables over internal variables to achieve returns in companies where these variables, some of which weaken the company and others gives them an advantage and strength in making use of variables n all these changes depend on the policies pursued by the company in dealing with local market conditions and global markets. As noted in the recent growing financial crises, most recently in 2007, this leads collapsing economies and the increasing volatility of the financial markets. The financial crises have an effective impact on the economy of the state, which infect and move this effect on the performance of individuals and companies in the same country which affects the economic stability depends on the amount of the investment portfolio invested abroad. Economic growth also depends on invested capital and the resources available and the extent to which the state of the neighboring countries and this reinforces the concept of globalization in terms of technological and informational exchanges in different geographic regions.


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Summary

This study investigated the relationship between economic variables and the abnormal returns listed by the ASE using data for 50 industrial firms from 2004 to 2012. The study indicates the importance of the market and the extent of its efficiency as the behavior of the stock return. The result explain of how the investors behavior in the financial market and the extent of information available to them to deal with the stock purchases and sales in addition to the economic variables, trade legislation, fiscal and monetary policies, which could affect the trading of shares in addition to organizing operations to groups and leader financial market which can also be their impact on the stock movements up and down.
Correlation method is designed to test the relationships between the five economic variables and abnormal returns. The results indicates the, consumer price index , gross fixed capital formation and money supply on index abnormal stock returns is statistically significant and no significant of industrial production index  and money market interest rate Index and abnormal returns.  The researcher recommends attention to economic variables of the fiscal and monetary policy in the Jordanian economy, which is characterized as a fast-growing so that must be the continuous analysis of market factors and determine the impact on abnormal returns for the shares of companies which strengthens the competitive position of companies in the market.

References

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ANALIZA ZALEŻNOŚCI POMIĘDZY SIŁAMI EKONOMICZNYMI A NORMALNYM ZWROTEM NAKŁADÓW: DOWÓD EMPIRYCZNY

Streszczenie:


Rynki finansowe odgrywają istotną rolę w gospodarce Jordanii, organizują swoje działania w ciągle zmieniającym się środowisku, i pracują nad przeniesieniem zasobów lokalnych, poprzez kanały wytwórcze do znajdujących inwestycji zagranicznych. Celem niniejszego artykułu pracy jest analiza relacji między zmiennymi ekonomicznymi i anormalnych zwrotami na giełdzie w Ammanie. W artykule wykorzystane zostały dane zmiennych takich jak 50 firm przemysłowych z okresu od 2004 do 2012. Wyniki wskazują, że indeks cen konsumpcyjnych, nakłady brutto na środki trwałe, a podaż pieniądza na indeksy anormalnych zwrotów akcji, jest istotna statystycznie a niewielkie znaczenie ma wskaźnik produkcji przemysłowej wraz ze stopą procentową indeksu rynku pieniężnego i anormalnych zwrotów. Badacz zwraca uwagę na zmienne ekonomiczne polityki fiskalnej i monetarnej w gospodarce Jordanii, które charakteryzuje się jako szybko rozwijająca, tak ciągła analiza czynników rynkowych, takich jak anormalne zwroty na akcje spółek, które wzmacniają pozycje konkurencyjną przedsiębiorstw na rynku, musi być prowadzona.


Słowa kluczowe: siły ekonomiczne, anormalny zwrot nakładów, giełda, Emerging markets (Jordania)


經驗性證據:經濟力量和異常報酬之間的關係分析

摘要:金融市場在約旦經濟組織其業務在不斷變化的環境中,這是工作在當地的資源,通過生產渠道旁邊的外國投資轉移起著至關重要的作用。本研究的目的是分析在安曼證券交易所的經濟變量和異常報酬之間的關係。本文使用的變量,如50工業企業與2004年至2012年的數據。結果表明,居民消費價格指數,固定資本形成總額和貨幣供應量的指標異常報酬在統計上是顯著且無顯著工業生產指數和貨幣市場利率指標和異常回報。研究者建議關注在約旦經濟的財政和貨幣政策,其特點是作為一個快速成長的,這樣必須是市場因素的不斷分析和確定公司,增強股份對異常收益的影響的經濟變量公司在市場的競爭地位
關鍵詞:經濟力量,異常股票收益率,股票市場,新興市場(約旦)

 
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