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Banks' financial innovation and the demand on money

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  • Ala' Bashayreh
  • Mohammad W. Alomari
  • Samer Abdelhadi
  • Naderh Mryan

Abstract

Financial innovation has come through improvement over time in financial tools and payment instruments used in the lending and borrowing of funds. This study aims at investigating the effect of electronic money on demand for money in Jordanian economy. The study uses ordinary least square (OLS) regression model to analyse a panel data over the period of (2011-2016), depending on data collecting of 13 commercial banks in Jordan. Results reveal that both GDP growth and the growth of visa cards number of each bank have positive and significant effect on the demand for money. On other hand, money demand was found to be negatively related with growth of interest rate, growth of total credit facilities granted by each bank, technological progress and utility bills paying service.

Suggested Citation

  • Ala' Bashayreh & Mohammad W. Alomari & Samer Abdelhadi & Naderh Mryan, 2019. "Banks' financial innovation and the demand on money," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 12(3), pages 169-179.
    • Handle: RePEc:ids:ijmefi:v:12:y:2019:i:3:p:169-179
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    Cited by:

    1. Hakan Yilmazkuday & M. Ege Yazgan, 2009. "Effects of credit and debit cards on the currency demand," Applied Economics, Taylor & Francis Journals, vol. 41(17), pages 2115-2123.

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