Determining the causality relationships among FDI determinants: evidence from Jordan Online publication date: Sat, 26-Jul-2014
by Hussain Ali Bekhet; Raed Walid Al-Smadi
International Journal of Sustainable Economy (IJSE), Vol. 6, No. 3, 2014
Abstract: Economic theory suggests that FDI reinforced economic growth leading to economic development. The present paper analyses four macroeconomic factors that are affecting FDI inflows in Jordan. However, it examines the long-run and short-run causality relationships among inflation rate (INF), gross domestic product (GDP), broad money supply (M2), exchange rate (EX) and FDI inflows for the (1980-2011) period. It also uses augmented Dickey-Fuller (ADF) and Phillips-Perron (P-P) for testing stationarity; Johansen and Juselious for testing the cointegrating relationships among variables and Engel and Granger for testing the short-run causality relationships among variables. The results suggest that the variables are cointegrated and it shows various causality directions among them. These findings are important for Jordanian policy makers to determine the main macroeconomic factors that may increase FDI inflows to Jordan and reinforce the Jordanian economic growth and development.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Sustainable Economy (IJSE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook