Abstract

The study discussed the efficiency of financial market performance and the banking sector in terms of economic growth in the two sample countries (The Jordanian Hashemite Kingdom and the Republic of Egypt) because the data are available in these two countries and because their economies reflect different production systems (sevice, icome, and agricultural) let alone its representation of the Arab economic map . The study limits itself to the data of the period extending from (1981-2003) as regards the financial market and from (1994-2003) regarding the banking sector. The study relied on the descriptive and analytic method in order to come to grips with the financial market and the banking sector notions . The researcher also followed the quantative method in order to analyze the economic reality of the two sample countries (Jordan and Egypt) and analyze the reality of their financial and banking indicators . The researcherُs point of departure is a hypothesis claiming that :

There is a relationship of impact ands influence between the financial market, the banking sector ,and the economic growth and this relationship is manifest in the two sample countries (Jordan and Egypt) besides the main objectives of the study are :

1-The assessment of the role of both the financial market and the banking sector via many expressed indicators i.e. (the market   value(X₁), the circulation value(X₂), the share rotation average(X₃) and the banking loans offered for the private sector .

2-The identification of the degree of relationship between the economic growth and the indicators of both the financial market and the banking sector .

3-The measurement of magnifying and shrinking apertures in the two sample countries related to (GDP) within the mechanism of the   current prices (the market) .

4-The calculation of the economic growth averages for the indicators reflecting the market (the market value, the circulation value, and the share rotation average).

5-The calculation of capital coefficient \ resultant in the two sample

   Countries in its two bifurcation’s (incremental & average).

6-The calculation of marginal values and elasticities of econometrics models for the countries of the case study by using Minitab packages and (OLS) method to get (blue).

The study make a number of conclusions such as:

In spite of the development of financial market and banking sector through past decade in Arab world and specially in case study countries but it’s still small size and little scope of economic activity and should need more development through various macro economic policies.

More over, the study recommended and advising to make more facilities to banking structure to present the role of the go-between the savers and investors the financial surplus and encourage the dealing with certificates.