An Examination Into the Causal Links Among Inward FDI Determinants: Empirical Evidence From Jordan

Abstract

This paper examined the causal links between inward foreign direct investments (FDI) and its determinants (i.e., gross domestic product, education, trade openness, infrastructure, and technological abilities) for Jordan over (the period 1980 – 2018). The paper used vector error correction model. The results of the study considered that gross domestic product, trade openness, education, infrastructure, and technological abilities are primary engine of inward FDI in (long term and short term). Thus, the results have vital role for the policy makers in Jordan to formulate domestic and foreign policies. This study relied on three essential parts. Firstly, FDI is a significant source of capital that promotes economic growth. Secondly, the question of what are the leading drivers of FDI remains inadequate in the literature. Finally, this research adds to the literature by using different econometrics techniques and long span of yearly time series data.