The Impact of Banking System and Stock Market Development on the Growth of the Industry, a Comparative Study between Jordan and Egypt

The study aims to measure the impact of indicators of the development of the banking system and the stock market on the growth of the industry in both Jordan and Egypt. The study relied on data obtained from 1995 to 2020. In order to achieve the objective of the study, the relationship of cointegration and causation was adopted, as well as the vector model of error correction between the indicators of the development of the banking system and indicators of the development of the stock market and the growth rate of value added to industry in both Egypt and Jordan. The study was divided into the theoretical framework, previous studies, study methodology, and evaluation of study models, as well as results and recommendations. The study found that the indicators of the development of the banking system and the stock market in Jordan are higher than in Egypt, and the interest rate on lending in Jordan is lower than in Egypt, which means a lower cost of credit in Jordan compared to Egypt. There is also a long-term equilibrium relationship between the indicators of financial development in its two parts (the banking system and the stock market) and the rate of growth of the added value of industry in both Jordan and Egypt. The study recommends the need to increase the bank credit granted to the industrial sector in both Egypt and Jordan, with the need to increase the activity rate of the stock market in both countries.