International Trade in Services and Economic Growth: The Case of Jordan

Abstract

The aim of this study is to investigate the impact of services imports on Jordanian economic growth during 1990–2012. Regression analysis is based on an output growth equation, utilizing the Fully-Modified Ordinary Least Square method after performing the appropriate statistical tests. The results suggest that the coefficient on total imports (manufacturing plus services) is positive and significant, whereas services imports (alone) have a significant but negative correlation with output per capita. This finding has been mainly driven by the negative significant effect of business services, which in Jordan’s case, could not-as usually expected-induce technological progress and enhance economic growth.