Review of Foreign Direct Investment in Jordan

Abstract

Globalization has made worldwide mobility of money extremely easy. The investors prefer to invest in places that offer attractive returns and are relatively less risky. The inflow of FDI gives developing countries access to capital that would otherwise not be available. FDI also provides much needed foreign exchange and therefore helps to adjust some of the macroeconomic imbalances in developing countries.  Jordan is in the growth mode, but the resources available is limited and very often insufficient, hence they are also in the race to attract international investments.  The main objectives of this study are to find out the status of Jordan as a destination for FDI, the factors that attracts FDI into Jordan, and the factors that hinder the flow of FDI into Jordan. This study is based on secondary data and covers a period of five years.  The study analysis various determinants of FDI like market size, economic growth, infrastructure, political risk, corruption, labor market, raw materials, technological readiness, innovation, financial system, taxation, cost of capital and ease of doing business. The study reveals that Jordan’s position in the global FDI map is on the decline and most of its rankings by global agencies are dropping year after year.