Foreign Direct Investment Incentives: The Case of Jordan

There are many factors that influence and determine the level of foreign direct investment (FDI) in a certain country. Investment incentives, other things being equal, are effective in attracting FDI and altering the foreign direct investment location decision if, and only if, they are properly introduced and well administered. However, incentives (government promotional policies) may be negated by other regulatory policies often adopted regarding foreign investment.
The Jordanian government has striven, for decades, to attract foreign investments. The government has undertaken many changes and amendments to the laws and regulations pertinent to foreign investments. However, the level of foreign investment in Jordan is still negligible, compared with the government’s aspirations and desires. The main purpose of this study is to investigate the importance of investment incentives in attracting FDI from the perspective of both the government officials and foreign investors. In addition, it is intended to investigate the role of regulatory policies in deterring foreign investment. The first part outlines the problem, and the objectives of the study, with a review of the literature relevant to the subject and the impact of FDI specifically in Jordan. The research method and field work procedures are described in detail and then the results of the empirical studies are presented and analysed in detail.
Finally, the conclusions reached are given, together with some recommendations for further research into the subject.