Exploring Daily Sectoral Interactions with the General Index in the Amman Stock Exchange: An ARDL Approach to Short- and Long-Run Dynamics in the Financial and Industrial Sectors (2023?2025)

The present study targets to rigorously quantify the short- and long-run causal effects exerted by daily fluctuations in the financial and industrial sector indices on the ASE?s general index. The covered period is from January 1, 2023 to July 31, 2025 by using ARDL approach. The resulted model in this study was the ARDL (2,2,2). Outcomes of this model indicate that together the financial and industrial sector indices have statistically momentous and optimistic effects on the Amman Stock Exchange GI in both the short and long run. The financial sector demonstrates a markedly stronger influence than the industrial sector, highlighting its central role in driving movements of the GI. Long-run outcomes reveal that changes in the financial sector index are transmitted more strongly and persistently to the general index compared to changes in the industrial sector. Short-run dynamics show that variations in the financial sector have a stronger immediate effect on the GI than those in the industrial sector. The relatively small error correction term suggests a slow adjustment toward long-run equilibrium, indicating that deviations from equilibrium persist over multiple periods before full correction. Overall, the findings emphasize the dominant part of the financial sector in shaping the general market performance in the Amman Stock Exchange.