DOI: https://doi.org/10.36347/sjebm.2026.v13i09.002

Pages: 430-440

This study analyzes the drivers of private investment in Jordan from 1970 to 2024, with a particular emphasis on the financial resource management (domestic savings, private credit, lending rates, inflation and exchange rates). The study is based on yearly data and proceeds through the ARDL bounds testing framework to consider the question whether or not the annual savings/credit conversion in productive investment is successful, and whether the macroeconomic turmoil and the costs of financing affect the transmission. The findings confirm cointegration between the variables, and domestic savings and private credit have a positive effect on investment in both the long-run and short-run, while lending rates and inflation and exchange rate depreciation have a significant and negative influence. The error correction term suggests some adjustment toward equilibrium of the order of about a year. Bi-directional links between investment and both saving and credit are found in the causality tests, which signal feedback effects rather than a unidirectional causality from finance to investment. These results suggest that the Jordanian policy makers should focus on the importance of macro-economic stability, competitive financing rates and the efficient distribution of financial resources for the improvement of private investments. Data for all aggregates, however, suffer from limitations and possible measurement biases, and public and private investment cannot be separated, requiring cautious interpretation and subsequent investigation at a sectoral level.