Foreign Direct Investment and Economic Growth in Jordan

Torki M. Al-Fawwaz

Abstract


This study aimed to measure the impact of FDI on economic growth in Jordan for the period 2000-2013. The results of the Error Correction Model that direct foreign capital has a weak effect on economic growth, and the results support the argument that foreign direct investment may not enhance the manufacturing capacity. Add to that the export had a positive and statistically significant impact on growth. The financial development, as measured by M2 / GDP has small effect on long run growth and has no effect on the short run, which may be returned to the escape of the money generated by high headers.
The study recommended to encourage the flow of foreign investment because it would contribute to the economic growth in the Jordan through the study of the constraints that limit the flow of foreign investment. And a commitment to policy clear and long-term on the promotion of foreign investment, in order to avoid large fluctuations witnessed by the Arab and foreign investments in the Jordan during the previous period. Work has been done to clarify the mechanisms and investment opportunities in the Jordan.

Keywords


Foreign direct investment, economic growth, Error Correction Model

Refbacks

  • There are currently no refbacks.