In the past decade, the fundamental problems associated with the real gross domestic product (GDP) in Jordan are apparent since the foreign aid is highly influenced by macroeconomic shocks that have severely affected the GDP through changes in macroeconomic factors. However, this relationship has not been adequately addressed. The main purpose of this paper is to investigate the influence of foreign direct investment and aids and trade openness on economic growth in Jordan by employing time series data from 1970 to 2017. The Autoregressive Distributed Lag (ARDL) model and Bayer-Hanck Cointegration was employed to examine the relationship between the variables empirically. The findings revealed the existence of a long-run relationship among the variables. Foreign direct investment (FDI), aids, trade openness and structural breaks are positive and significantly influencing the economic growth in both short run and long run. The results recommended that higher foreign investment may increase the ability of aids to increase the economic growth. Therefore, policy makers should balance between investment friendly policies such as foreign direct investment that will be attracted into the country for sustainable economic growth.
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In-Text Citation: (Abueid, Haron, & Alkasasbeh, 2018)
To Cite this Article: Abueid, A. I. S., Haron, N. F., & Alkasasbeh, O. M. A. (2018). The Impact of Foreign Direct Investment, Aids and Economic Growth: Evidence from Structural Breaks for Jordan. International Journal of Academic Research in Business and Social Sciences, 8(11), 566–588.
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