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Fdi and export-led growth in jordan: evidence from cointegration and causality test

Author

Listed:
  • Janesh Sami

    (Department of Economics,Banking and Finance,Fiji National University)

  • Fuad Kreishan

    (Dean, Faculty of Business Administration and Economics,Al-Hussein Bin Talal University,Jordan)

Abstract

In this paper, we examine the relationship between foreign direct investment (FDI), exports and economic growth in Jordan by applying bounds testing procedure suggested by Pesaran et al. (2001) and Johansen cointegration test (1988,1990). Both cointegration tests reveals, that there is a long run relationship between economic growth, exports and foreign direct investment in Jordan for the sample period 1970-2010.We find robust evidence based on three estimators that foreign direct investment and exports exert positive and significant impact on economic growth in the long run. Results from causality tests indicate that there is long run causality running from exports and foreign direct investment to economic growth in Jordan. It is thus important that policymakers in Jordan remove obstacles to FDI inflow and improve absorptive capacity to reap positive growth effects.

Suggested Citation

  • Janesh Sami & Fuad Kreishan, 2012. "Fdi and export-led growth in jordan: evidence from cointegration and causality test," Economics Bulletin, AccessEcon, vol. 32(2), pages 1-18.
    • Handle: RePEc:ebl:ecbull:eb-12-00384
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    File URL: http://www.accessecon.com/pubs/EB/2012/Volume32/EB-12-V32-I2-A18.pdf
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    Citations

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    Cited by:

    1. Alam, Arif & Malik, Ihtisham Abdul & Abdullah, Alias Bin & Hassan, Asmadi & Faridullah, & Awan, Usama & Ali, Ghulam & Zaman, Khalid & Naseem, Imran, 2015. "Does financial development contribute to SAARC׳S energy demand? From energy crisis to energy reforms," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 818-829.
    2. Daren Conrad & Jaymieon Jagessar, 2018. "Real Exchange Rate Misalignment and Economic Growth: The Case of Trinidad and Tobago," Economies, MDPI, vol. 6(4), pages 1-23, September.
    3. Faik Bilgili & Nadide S. Tülüce & Ibrahim Doğan & H. Hilal Bağlıtas, 2016. "The causality between FDI and sector-specific production in Turkey: evidence from threshold cointegration with regime shifts," Applied Economics, Taylor & Francis Journals, vol. 48(5), pages 345-360, January.

    More about this item

    Keywords

    Foreign direct investment; exports; economic growth;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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