Measuring the Impact of Foreign Direct Investment Inflows on the Jordanian Exports Performance during the Period (1994-2022)

Abstract

Purpose:  The study aims at measuring the impact of the inflow of foreign direct investment on the Jordanian exports performance during the period (1994-2022) in light of the economic reforms adopted by the Jordanian authorities following the economic crisis that afflicted the Jordanian economy at the end of the eighties, which included free trade policy to stimulate large export-oriented investment projects. Research Methodology: The researcher used econometrical analysis based on the methodology of autoregressive time-distributed delay of variables (ARDL) in order to measure the long-term relationship between the flow of foreign direct investment and commodity exports for the study period, using annual data from various issues published by the Central Bank of Jordan. Findings: The results revealed that there was appositive weak long-term relationship between the flows of foreign direct investments and Jordanian merchandise exports during the study period, due to the fact that most of the foreign direct investments were directed to the local market rather than to the global markets. Social implications: The study recommended the importance of improving the investment environment in Jordan and promoting attracting large foreign direct investments destined for export to take advantage of the free trade agreements signed by Jordan. It also recommended the exploitation of national economic resources and available raw materials to achieve high added values and benefit from economies of scale.