The Impact of Foreign Direct Investment on the Economic Growth of Jordan (1990 - 2006)

Buthaina M.A. Al-Muhtaseb

Abstract


Various countries in the world, and Jordan is not an exception, have been competing to attract foreign direct investment (FDI). This has been one of the reasons to investigate Jordan’s position and to try to study FDI impact on Jordan’s economic growth.
FDI inflows to Jordan have considerably increased during the past ten years, reaching an annual average of 30% of the size of total investment. Arab countries (as a group) are considered a major source of these investments, which have been concentrated in the fields of infrastructure, industry, hotels and recently construction.
 FDI in Jordan has complemented the inadequate domestic capital, but its role -as has been shown through the application of Cobb-Douglas production function- in the development of labor force in addition to transfer and diffusion of technology has not been materialized yet. This requires pursuing the policies that realize economic and political stability, in addition to developing an effective promotion system that attracts more and better kinds of investments.


Keywords


Foreign Direct Investment, Economic Growth, Jordan

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