The Impact of Investment Environment Factors on Foreign Direct Investment in Jordan: An Econometric Study 2000-2023

Abstract

This study aimed to examine the impact of investment environment factors on foreign direct investment (FDI) in Jordan during the period 2000-2023. Specifically, it investigated the effects of economic growth, inflation rate, political stability, and workers' remittances on FDI using the descriptive and analytical approach based on the Autoregressive Distributed Lag (ARDL) model.

The study found a statistically significant positive impact of both economic growth and workers' remittances on FDI in Jordan. Conversely, it identified a statistically significant negative impact of inflation and political stability on FDI. Based on these findings, the study recommends the formulation of strategies to attract more foreign investments, which, in turn, contribute to increasing GDP by expanding development and capital projects that create job opportunities for Jordanians. Additionally, the study emphasizes the importance of improving Jordan’s infrastructure, as it serves as a fundamental pillar for attracting both foreign and domestic investments.