Association Between Factors Likely to Have an Influence on Foreign Direct Investment: The Case of Jordan

Abstract

Objective: The research objective is to discover associations between factors likely to have an influence on multinational corporations’ foreign direct investment in Jordan. The scope of the research and its objectives are driven by, first and foremost, the fact that there is increasing interest in MNCs' investments in the MENA region and particularly in Jordan, and second there is a lack of academic research jointly examining the factors behind locational decisions. Research Design & Methods: This study has adopted quantitative methods (non-experimental) because we are able to measure the relationship between the set of variables and set of score. The study designed based on of international business literatures that includes economic, legal, social political factors. Questionnaire survey used to collect that data from sample of 50 companies in operate in Jordan and either owned by foreign inventors or are subsidiary of multinational companies. Findings: the study results indicate mixed views among MNCs because of the current situation and our research results demonstrate that MNCs’ location decision is immensely influenced by economic and political factors, and less by both legal and cultural factors. This indicates there is a similarity with other neighboring countries and significant difference from developed economies western countries. In addition, research finding also indicates that some MNCs mitigating their risk exposure by shifting theirinvestments to relatively more stable business environments, such as the Gulf region and Jordan compared with other Levant countries as confirmed by the FT 2014. Implications & Recommendations: The finding of this research indicate that policy maker in Jordan should concentrate on supporting the macroeconomic environment and maintain its political stability to continue attract FDI. Contribution & Value Added: The existing MNC theory did not jointly examine the factors influencing location decisions, given the scarcity of national publications in the field of international business in Jordan, this research aims at enriching the national literature in this field.