Analytical study of the relationship between investment and trading volume in the Damascus Securities Exchange
Keywords:
Financial performance, Kida model, Palestine Stock Exchange, Amman Stock Exchange, EPSAbstract
The aim of the research was to study the relationship between public and private investment and the trading volume of companies listed on the Damascus Stock Exchange, with the presence of controlling variables such as the inflation rate and the exchange rate, during the period from 1/1/2010 to 12/1/2021.
The Autoregressive Distributed Lag (ARDL) model was used. A descriptive analysis of the data was conducted using descriptive statistics to understand the distribution of the data and identify the presence of extreme values. The stationarity of the variables was then tested using unit root tests (Phillips-Perron) to ensure the validity of the ARDL model. The ARDL model was then estimated and the long- and short-term relationships between investment, inflation rate, exchange rate, and trading volume were evaluated.
The research results showed a statistically significant relationship between investment and trading volume in the Damascus Stock Exchange, but this relationship is complex and multifaceted. The negative impact of private investment may be due to the increase in mergers and acquisitions as a result of the growth of private investment, which reduces the number of listed companies and thus the trading volume. Also, companies may resort to loans instead of increasing capital by offering new shares. The weak positive impact of public investment: is explained by the government's role in improving the infrastructure and creating a more attractive investment environment, which is positively reflected in trading activity in the market. However, the weakness of this impact indicates the existence of other factors that have a greater influence on investors' decisions and limit the effectiveness of public investment in stimulating trading.
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