ISSN: 2225-8329
Open access
The study aims to demonstrate the impact of fiscal and the quantitative monetary policy on the domestic and Foreign Direct Investment in Jordan during the period (2000-2011), where the study used two models, the first model is to assess the impact of the fiscal and quantitative monetary policy on the domestic investment, the study found that there is a negative relationship between the re-discount rate and the domestic investment, but not statistically significant, while there is a positive relationship with a statistically significant between the mandatory cash reserve and domestic investment, due to the presence of excess cash reserves at banks in Jordan. The study also showed a negative relationship between taxes and domestic investment, and a positive relationship between governmental capital spending and the domestic investment, this means the political effectiveness of the fiscal impact is greater than the monetary policy effectiveness on the domestic investment. The second sample demonstrates the impact of the fiscal policy and the quantitative monetary on Foreign Direct Investment, The study showed that there a presence of a statistically significant negative relationship between the re-discount rate and Foreign Direct Investment, while it showed a positive relationship between taxes and Foreign Direct Investment, the reason is that the government grant a tax exemptions to encourage Foreign Direct Investment.
Arbatl, E. (2011). Economic Policies and FDI Inflows to Emerging Market Economies, IMF Working Paper Middle East and Central Asia Department, p. 25.
Babaita, I., Abdulrasheed, A., and Mustapha. (2011). Impact of fiscal and monetary policy on level economics activity in Nigeria, Lapa journal of management science, jms/vol.1.2/0002.
Banga, R. (2003). Impact of Government Policies and Investment Agreements on FDI Inflows, working paper no. 116 Indian Council for Research on International Economic Relations Core-6A, 4th Floor, India Habitat Centre, Lodi Road, New Delhi-110 003.
Baum, A., and Koester, G. B. (2011). The impact of fiscal policy on economic activity over the business cycle–evidence from a threshold VA analysis, Deutsche Bundesbank, Wilhelm-Epstein-StraBe 14, 60431 Frankfurt am Main, Postfach 10 06 02, 60006 Frankfurt am Main.
Central Bank of Jordan, various issues
Jordan Department of Statistics, various issues.
Ndikumana, L. (2014). Implications of Monetary Policy for Credit and Investment in sub-Saharan African Countries, Department of Economics and Political Economy Research Institute, University of Massachusetts at Amherst.
Olweny, T., and Chiluwe, M. (2012). The Effect of Monetary Policy on Private Sector Investment in Kenya, Journal of Applied Finance & Banking, vol.2, no.2, pp. 239-287.
Radulescu, M., and Druica, E. (2014). The impact of fiscal policy on foreign direct investments. Empiric evidence from Romania, Economic Research, Vol. 27, No. 1, pp. 86–106, http://dx.doi.org/10.1080/ 1331677X.2014.947133.
Solomon, A. G. (2012). Impact of Euro-Area accession on fiscal and budgetary policy in Romania, Procedia-Social and Behavioral Sciences Journal, Vol. 62(24) pp. 733-738, http://www.sciencedirect.com/ science/article/pii/S1877042812035653
Zulkefly, A. K. (2010). Monetary Policy and Firms’ Investment in Malaysia: A Panel Evidence, IIUM Journal of Economics & Management 18, no. 2, by The International Islamic University Malaysia, pp. 221-253.
In-Text Citation: (Alawneh et al., 2015)
To Cite this Article: Alawneh, A. M., AL-Fawwaz, T. M., & Shawaqfeh, G. N. (2015). The Impact of the Fiscal and Quantitative Monetary Policies on the Domestic and Foreign Direct Investment in Jordan. An Empirical Study. International Journal of Academic Research in Accounting Finance and Management Sciences, 5(4), 1–13.
Copyright: © 2015 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode