The Role of Macro-Marketing Environmental Factors in Attracting [PDF]

The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct Investment: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan” "‫"دور عوامل البيئة التسويقية الكلية في جذب األستثمار األجنبي المباشر‬ ) ‫(دراسة تطبيقية على المناطق الصناعية المؤهلة في األردن‬

By Khalid Mahmoud Al-Badarneh 20149039

Supervisor Dr. Zakaria Ahmad Azzam

Submitted In Partial Fulfillment of the Requirements for the Degree of (Master of Marketing)

Faculty of Graduate Studies Zarqa University Zarqa - Jordan

Second Semester May, 2016

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‫‪The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct‬‬ ‫”‪Investment: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan‬‬ ‫"دور عوامل البيئة التسويقية الكلية في جذب األستثمار األجنبي المباشر"‬ ‫(دراسة تطبيقية على المناطق الصناعية المؤهلة في األردن )‬ ‫إعداد الطالب‬ ‫خالد محمود البدارنة‬ ‫‪20149039‬‬ ‫اشراف‬ ‫د‪ .‬زكريا احمد عزام‬ ‫تم اجراء هذا المشروع استكماالً لمتطلبات الحصول على درجة الماجستير في تخصص التسويق‪.‬‬

‫كلية الدراسات العليا‬ ‫جامعة الزرقاء‬ ‫الزرقاء‪ -‬األردن‬ ‫الفصل الدراسي الثاني‬ ‫أيار ‪2016 /‬‬

‫‪II‬‬

The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct Investment to Jordan: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan”

By Khalid Mahmoud Al-Badarneh

Supervisor Dr. Zakaria Ahmad Azzam Abstract. Attractiveness of the countries to Foreign Direct Investment (FDI) are usually linked to many of the macro and micro marketing environmental factors, But they are more closely connected to the macro marketing environmental factors, which is the focus of this research study. These macro factors have been separated into five major dimensions: Economical and Financial, Legal, Political, Infrastructural, and the Administrative Structure and Procedural Aspect. Each of these factors have been analyzed and taken into consideration. The researcher selected the Foreign Direct Investments which are located in the Qualified Industrial Zones (QIZ) in Jordan to test the hypotheses of the study. 220 questionnaires were distributed to all 55 companies located in the qualified Industrial Zones, 200 of the questionnaires were returned with a percentage of about 91%. After reviewing it, 13 questionnaires out of the 200 refused so 93.5% of total returned questionnaires were valid for analyses. The main findings were that foreign direct investors are attracted mainly to the political stability; this is followed by the Administrative Structure and Procedural Aspects of the governmental system and service departments. Economical factor of a country also plays a role in attracting the Foreign Direct Investments. The study also found out that the basic level of the Infrastructure is of essential importance. Derived conclusions from these results are that the country can increase its attractiveness for foreign direct investments by focusing on the country political stability, doing more enhancements to the Legal and Economical conditions. Also by enhancing the level of the Infrastructure which is necessary to operate and facilitate the industry, promoting the procedural aspects and transparency in the governmental institutions and offices. Key Words: Macro-Marketing Environmental Factors. Foreign Direct Investment (FDI). Qualified Industrial Zones (QIZ)

III

Authorization

I the undersigned (Khalid Mahmoud Khalil Al-Badarneh) authorize Zarqa Unvesrity to provide a copy of my thesis either in the form of written paper or electronically to the libraries, institutions or commission those whom involved in research and scientific studies in case they ask for it.

Name: ………………………………………………………………….

Signature: ………………………………………………………………

Date: ……………………………………………………………………

IV

The decision of the Examination Committee

This thesis titled (The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct Investment: Empirical Study at Qualified Industrial Zones (QIZ) in Jordan) has been discussed and has been approved on 19 /5 / 2016 by the Examination Committee.

Examination Committee

Dr. Zakaria Azzam

Signature

(Supervisor / Chairman): …………………………………

Dr. Abdel Fattah Al Azzam (Internal Evaluator): ………………………………………

Dr. Hamza Khraim

(Internal Evaluator): ………………………………………

Dr. Salim Khanfar

(External Evaluator): …………………………………….

V

Dedication

To The Soul of My Dad

VI

Acknowledgements

I would like to express my sincere appreciation to my advisor, Dr. Zakaria Azzam for his guidance, encouragement and continuous support through the course of this work. The extensive knowledge, vision, and creative thinking of Dr. Zkaria Azzam have been the source of inspiration for me throughout this work.

Besides my advisor, I would like to thank the rest of my thesis committee who accept to discuss this thesis and for the time and effort they spent in reviewing and evaluating it. It would be my pleasure to consider all of their insightful comments and recommendations, and to answer and respect their questions which will assist me to widen my research from various perspectives.

I would also like to extend my thanks and gratitude to the President of Zarqa University, and to all the members of marketing department, excellent teaching professors, staff and students. And special thanks to my family and my friends who supported me all the way, and to everyone who has contributed to the success of this study. Praying to Almighty God to give them all the grace and blessings.

Praise be to Allah, Lord of the Worlds

VII

Table of Contents Subject The Title in English The Title in Arabic Abstract Authorization Letter The Approval of the Examination Committee Dedication Thankfulness and Appreciations Table of Contents List of the Tables List of Figures

Page I II III IV V VI VII VIII X XI

Chapter One: General Framework of the Study 1-1: Introduction 1-2: Research Problem 1-3:Research Importance 1-4: Research Objectives 1-5: Research Hypothesis 1-6: Research Model 1-7: Procedural Definitions

1 2 3 4 5 5 7 8

Chapter Two: Theoretical Framework and Literature Review

10

2-1: Macro-Marketing Environmental Variables 2-1-1: Introduction 2-1-2: Economical and Financial Environment 2-1-2-1: Economical and Financial Environment in Jordan 2-1-3: Legal Environment 2-1-3-1: Legal Environment in Jordan 2-1-4: Political Environment 2-1-4-1: Political Environment in Jordan 2-1-5: Infrastructure 2-1-5-1: Infrastructure in Jordan 2-1-6: Administrative Structure and Procedural Aspects 2-1-6-1: Administrative Structure and Procedural Aspects in Jordan

11 11 13 16 19 21 25 28 29 30 33 35

2-2: Foreign Direct Investment (FDI) 2-2-1: Introduction 2-2-2: Definition of Foreign Direct Investment (FDI) 2-2-3: The importance of Foreign Direct Investment (FDI) 2-2-4: Determinants of Foreign Direct Investment (FDI)

37 38 38 40 41

VIII

2-2-5: Barriers to Foreign Direct Investment (FDI) 2-2-6: Removing Barriers Facing Foreign Direct Investments (FDI)

42 43

2-3: Qualified Industrial Zones (QIZ) 2-3-1: Introduction 2-3-2: Definition of Qualified Industrial Zone (QIZ) 2-3-3: Rules of Export in the Qualified Industrial Zones (QIZ) 2-3-3-1: Export Rules and Jordan – USA Free Trade Agreement

45 46 47 47 48

2-4: Foreign Direct Investment (FDI) in Jordan 2-4-1: Introduction 2-4-2: Jordan’s Experience with Foreign Direct Investment (FDI) 2-4-3: Jordan Free Trade Agreements (FTA) 2-4-4: Governmental Institutions and Commissions 2-4-5: Foreign Direct Investment’s (FDI) Lows and Regulations

51 52 52 56 57 57

2-5: Previous Studies 2-5-4: What Distinguish this Study

60 69

Chapter Three: Methodology 3-1: Introduction 3-2: Methodology 3-3: Research Population 3-4: Research Sample 3-5: Validity and Reliability 3-7: Research Determinants

70 71 71 71 71 72 73

Chapter Four: Data Analysis and Finding 4-1: Profile of Respondents 4-2: Descriptions of Research Variables 4-3: Test of Data validity 4-4: Hypothesis Testing

73 74 76 86 87

Chapter Five: Conclusions and Recommendations 5-1: Conclusions 5-2: Recommendations 5-3: References

96 97 99 101

Appendixes Appendix (1): The Questionnaire (English) Appendix (2): The Questionnaire (Arabic) Appendix (3): Questionnaire Evaluation Committee Appendix (4): The SPSS Result

106 113 120 121

IX

Abstract – In Arabic Abstract – In Arabic

129 List of Tables

Table (2-1) Transportation Data in 2014 Table (2-2) Telecommunications Capacity in 2014 Table (3-1) Reliability of the Variables (Cronbach Alpha) Table (4-1) Percentage of each characteristic in the questionnaire Table (4-2) Statistical criterion for interpreting arithmetic mean of the study

31 32 72 75 77

variables Table (4-3) Means and Standard Deviation for the Economical and Financial Environmental Variable Table (4-4) Means and Standard Deviation for the Legal Environmental variable

78

Table (4-5) Means and Standard Deviation for the Political Environmental Variable

81

Table (4-6) Means and Standard Deviation for the Infrastructure Variable Table (4-7) Means and Standard Deviation for the Administrative Structure and Procedure Aspect Variable.

82 83

Table (4-8) Means and Standard Deviation for the Attracting Foreign Direct Investment to Qualified Industrial Zones (QIZ) in Jordan variable

85

Table (4-9) Mean and Standard Deviation for the Independent Variables Table (4-10) Normal distribution of the Independent Variables Table (4-11) Correlations of the Independent Variables Table (4-12) Results of Multiple Regression for the Main Hypothesis Table (4-13) Results of Simple Regression for the First Sub- Hypothesis Table (4-14) Results of Simple Regression for the Second Sub- Hypothesis Table (4-15) Results of Simple Regression for the Third Sub- Hypothesis Table (4-16) Results of Simple Regression for the Fourth Sub- Hypothesis Table (4-17) Results of Simple Regression for the Fifth Sub- Hypothesis. Table (4-18) Results of Stepwise Regression

86 87 88 89 90 91 92 93 94 95

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List of Figures Figure (1-1) Research Model.

7

X

Chapter One General Framework of the Study 1-1

Introduction

1-2

Research Problem

1-3

Research Importance

1-4

Research Objectives

1-5

Research Hypothesis

1-6

Research Model

1-7

Procedural Definitions

1

1-1: Introduction

Foreign Direct Investment (FDI) is an important part of the massive private investment which is driving economic growth around the world, particularly in the past two decades. FDI is being sought by most, if not all, developing countries as a means of complementing the level of domestic incentives, as well as securing economy-wide efficiency gains through the transfer of appropriate technology, management knowledge, and business culture, access to foreign market, increasing employment opportunities, and improving living standards. To this end, policy makers have considered various incentives and policies to attract FDI, and to ensure its stability with the domestic economic development objectives. The competition for the world’s FDI flows is fierce. Foreign private investors look for certain important pointers such as freedom to control investments, convertible currencies, greater privatization, stock market reform, greater political stability, and a legal framework for doing business. Beyond these general characteristics of wellfunctioning market economy, investment in infrastructure, particularly transport and telecommunications, are also important. Thus, FDI flows where opportunities abound and where returns are safely realized. (Dabour, 2000) There is a competition among the developing countries for winning the flow of foreign direct investment, the country which offers more safely and profitable investment opportunities wins the global completion for this floating capital. However, investment in developing countries is also increasing, many developing countries, especially the newly industrializing Asian countries and more recently some Latin American countries, are successfully developing by opening up their economies to FDI under toward-oriented development polices, other Arab countries are also doing their best to get their part of the foreign investment inflow. Taking into consideration the fact that FDI inflows were among the prime movies behind the industrial dynamism of these rapidly growing developing countries, and is one of the main sources of the cash flow into their economy, that along with the other many advantages. Policy makers in host countries must, therefore, understand the relationship between FDI and their own goals before committing themselves to structural changes –economically, Politically, Legally, and other necessary changes aimed at encouraging FDI to their own countries.

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1-2: Research Problem One of the economic problems in developing countries that they don’t have enough national saving to finance their investments, they are in constant need for foreign capital in forms of both direct and indirect investment. As Foreign Direct Investment (FDI) is a major source of foreign fund, these developing countries – Jordan is part of them - have to work hard and do their maximum efforts to attract FDI to their home towns and to make sure to drop any restrictions and to remove all obstacles in the face of FDI. Usually Foreign Direct Investment (FDI) in developing countries associated with high risk, mainly the political risk, inappropriate Legal system, economic constrains, poor infrastructure, and non-advanced administrative structure, also the cultural, language barriers and variations in religious beliefs. So the decision to go to international market to invest in must be made with care due to the potential risks and obstacles that emerge from one or all of these factors in the host countries. We can’t exclude Jordan from this fact, especially the geographical location of Jordan in Middle East and among many countries which are having a Political and civilian conflict and revaluations against its regime, mainly in Syria, Iraq, Yemen, Libya, and Egypt, and the Palestinian – Israeli conflict, all these facts make the decision of investing in Jordan is of a big risk for Foreign Direct Investments (FDI). Here, the problem of the study comes out; it is to understand the effect or the role of these Macro-Marketing Environmental variables or factors (Economical and Financial, Legal, Political, Infrastructure, and the Administrative Structure and Procedural Aspects) in attracting Foreign Direct Investment (FDI) to Jordan and particularly in the Qualified Industrial Zones (QIZ) as an empirical study and through answering the following questions:

-

What is the role of the Economical and Financial environment in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan?

-

What is the role of the Legal environment in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan?

3

-

What is the role of the Political environment in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan?

-

What is the role of the Infrastructure in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan?

-

What is the role of the Administrative Structure and Procedural Aspects in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan?

1-3: Research Importance Jordan is one of the countries that has recognized the importance of Foreign Direct Investment (FDI) as a key tool for debugging and economic openness, in order to achieve the goal of attracting foreign investment; Jordanian government has taken a lot of corrective actions, enhancement of the laws and regulations with a view to make the right investment climate to attract foreign investment, taking into consideration the competition by the neighboring countries. (Kaddumi, 2004)

-

Scientific importance: The scientific importance of this study is to provide Arab libraries with one of the studies in the field of attracting Foreign Direct Investment (FDI), also to contribute to scientific knowledge and to offer the results and the recommendations of this study to those who are interested in and involved in the field of attracting FDI to Jordan.

This can be noticed by identifying the importance of the Foreign Direct Investment (FDI) in Jordan’s development by participating in the growth of national economic, creating new job opportunities, bringing up new technologies to Jordan, increasing the standard of living and developing isolated areas.

-

Practical Importance: This study can be a guide to the governmental officials and to other departments those duties are to take care and manage the Foreign Direct Investment

4

(FDI) in Jordan. The study can help them by highlighting the factors that are attractive foreign direct investors so they can utilize it better, and the factors which are not attractive to Foreign Direct Investment (FDI) so the officials can enhance it to be attractive.

1-4: Research Objectives This study aims to give an overview of the role of macro marketing environmental factors in attracting Foreign Direct Investment (FDI) to Jordan. Below are some of sub aims that could be abstracted from the main goal of the study:

1- To examine the role of the Economical and Financial environmental factors in attracting foreign direct investment (FDI) to qualified industrial zones in Jordan. 2- To examine the role of the Legal environmental factor in attracting foreign direct investment (FDI) to qualified industrial zones in Jordan. 3- To examine the role of the Political environmental factor in attracting foreign direct investment (FDI) to qualified industrial zones in Jordan. 4- To examine the role of the Infrastructure factor in attracting foreign direct investment (FDI) to qualified industrial zones in Jordan. 5- To examine the role of the Administrative Structure and Procedural Aspect factor in attracting foreign direct investment (FDI) to qualified industrial zones in Jordan.

1-5: Research Hypothesis Based on the problem statement and the objectives of the study the researcher could put the following main hypothesis:

5

(H0) There is no statistically significant role (a0.05) for Macro-Marketing Environmental factors (Economical and Financial, Legal, Political, Infrastructure, and the Administrative Structure and Procedural Aspects) in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan. Out of the main hypothesis we derive the following sub-hypotheses: -

(H01) There is no statistically significant role (a0.05) for Economical and Financial factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

-

(H02) There is no statistically significant role (a0.05) for the Legal factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

-

(H03) There is no statistically significant role (a0.05) for the Political factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

-

(H04) There is no statistically significant role (a0.05) for the Infrastructure factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

-

(H05) There is no statistically significant role (a0.05) for the Administrative Structure and Procedural Aspects factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

6

1-6: Research Model

Proceeding from research problem and its hypotheses the researcher design a research model, based on previous studies that were reviewed (Birnleitner, 2014); (Birnleitner, 2013); (Krais, et, al., 2010); (Khrawish and Siam, 2010); (Mwafaq, 2010); (Azzam and Wadi, 2008); (Al-Khouri and Al-Qudah, 2006); and (Kaddumi, 2004) to measure the role of macro-marketing environmental variables which shown in the following figure (1-1) in attracting foreign direct investment to Jordan. Independent Factors

Dependent Factor

Macro-Marketing Environmental Factors

Foreign Direct Investment (FDI)

Economical and Financial Environment

Legal Environment

Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan

Political Environment

Infrastructure

Administrative Structure and Procedural Aspects

Figure (1-1): Research Model.

7

1-7: Procedural Definitions -

Foreign Direct Investment (FDI): Foreign Direct Investment FDI in one economy is “a category of international investment made by an entity in one economy with the objective of establishing a lasting interest in an enterprise resident in an economy other that of the investor. (Milio, 2008)

-

Investment Environment: The economic and financial conditions in a country that affect whether individuals and businesses are willing to lend money and acquire a stake in the businesses operating there which is affected by many factors, including: poverty, crime, infrastructure, workforce, national security, political instability, regime uncertainty, taxes, rule of law, property rights, government regulations, government transparency

-

and

government

accountability.

(www.investopedia.com,2016)

Macro Environment: The macro environment comprises those factors which are common to all firms in the industry. In many cases the same factors affect firms in other industries. Government policy, the economic climate, political stability, geographical location and the culture within the countries in which the firms operate are common factors for all firms, but will affect firms differently according to the industries they are in. (Blythe, 2014)

-

Economical and Financial Environment: Consists of external factors in a business' market and the broader economy that can influence a business. The economic environment can be divided into the microeconomic environment, which affects business decision making - such as individual actions of firms and consumers - and the macroeconomic environment, which affects an entire economy and all of its participants. (www.Study.com, 2015)

-

Legal Environment: Refers to the code of conduct that defines the legal boundaries for business activity. To understand these boundaries, it is essential to first to have a basic understanding of the law and how it affects business and business practices. The nature of

8

business spans over a number of legal realms, all of which are continuously influenced by the needs and demands of the business community, consumers and the government. Each has a distinct stake and voice in this vibrant legal environment. (www.Enotes.com, 2016)

-

Political environment: Political Environment Consists of a set of political factors and government activities in a foreign market that can either facilitate or hinder a business' ability to conduct business activities in the foreign market. There is often a high degree of uncertainty when conducting business in a foreign country and this risk is often referred to as political risk or sovereign risk. (www.Study.com, 2015)

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The Infrastructure: The totality of all earning assets, equipment and circulating capital in an economy that serve energy prevision, transport service and telecommunication, structure for the conservation of natural resources and transport routes in the broadest sense, and building and installation of public administration, education, research, health care and social welfare. (Torrisi, 2009)

-

Administrative Structure: The organizational characteristics that shape decisionmaking process, exerts a powerful influence on the objective public agencies pursue. (Smith, 2007)

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Qualified Industrial Zone (QIZ): Any area that has been specified as such by the U.S. Government, and which has been designated by local authorities as an enclave where a product manufactured in the zone may enter U.S. markets without payment of duty or excise taxes, and without the requirement of any reciprocal benefits. (www.Jordan.gov.jo, 2016)

9

Chapter Two Theoretical Framework and Literature Review

2-1: Macro-Marketing Environmental Variables 2-1-1: Introduction 2-1-2: Economical and Financial Environment 2-1-3: Legal Environment 2-1-4: Political Environment 2-1-5: The Infrastructure 2-1-6: Administrative Structure and Procedural Aspects

10

2-1: Macro-Marketing Environmental Variables

2-1-1: Introduction Foreign direct investments (FDI) have a major impact on the economics of the host countries; it can offer a lot of advantages. First of all it is considered an important source of foreign capital which can contribute to the growth of national economic, usually local countries were unable to offer such kind of fund by it selves. Also new (FDI) inflows can help the economics of host countries through creating new job opportunities and through offering employee training, by operating the new businesses practices it also contributes to human skills development. Foreign Direct Investment (FDI) results in technology transfer to host countries particularly in the form of new and advanced industries, usually this cannot be achieved through local financial system of these host countries independently; also the industries in developing countries can be promoted through applying the new technology. Trade enhancement by promoting competition in the domestic input market is another advantage of (FDI); it could open an easy access to foreign markets. Finally, learning and experience is an indirect advantage for foreign countries. (FDI) exposes national and local governments, local businesses, and citizens to new business practices, management techniques, economic concepts, and technology that will help theses developing local businesses and industries. (Finance & Development Magazine, 1999) The attitude towards Foreign Direct Investment (FDI) has changed considerably over the last couple of decades, as most countries have liberalized their policies to attract investment from foreign multinational corporations (MNCs). On the expectation that foreign MNCs will raise employment, exports or tax revenue, or that some of the knowledge brought by the foreign companies may spill over to the host country’s domestic firms, governments across the world have lowered various entry barriers and opened up new sectors to foreign investment. An increasing number of host governments also provide various forms of investment to encourage foreign-owned companies to invest in their jurisdiction. These include fiscal incentives such as

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tax holidays and lower taxes for foreign investors, financial incentives such as grants and preferential loans to MNCs, as well as measures such as market preferences, infrastructure and sometimes even monopoly rights. (Blomstrom, 2003) Multinational companies and firms who are going to establish subsidiaries and business entities in foreign countries or on international market have to deal with many different influencing factors during the integration process of the subsidiary to the origin company. Macro-Marketing factors as well as intercultural dimensions have to be considered in such a complex venture. (Birnleitner, 2013) Jordan is considered one of the developing countries who first took a steps to encourage foreign direct investment (FDI), it has made a remarkable reform in many of the sectors who have direct contact and role in attracting foreign direct investment (FDI), this includes the investment rules and regulations, infrastructure, opening new free zones and qualified industrial zones (QIZ), customs incentives, income and sales tax incentives, advanced labor law, transportation system, telecommunication and banking and lately development zones. (www.jic.gov.jo, 2016) These efforts had a remarkable results, Jordan is classified by the UNCTAD investment benchmarking system as among the top twenty countries in the world in terms of attracting inflows of foreign direct investment (FDI). Supported by a successful privatization drive and developed financial sector, Jordan has an almost fully liberalized exchange regime, permitted full ownership of investment on most sectors, a moderate social and cultural climate, an advanced infrastructure, and the highest rate of literacy in the region (Mansur, 2008) This research is an attempt to analyze the macro-marketing environmental factors represented by economical and financial, legal, political, and infrastructure, and administrative structure and procedures aspects factors and their role in attracting foreign direct investment (FDI) to Jordan as one of the leading country in the regions in term of encouraging this trend. Here below we are going to discuss some of these macro-marketing variables in details.

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The Macro-Marketing environmental Variables comprise those factors which are common to all firms in the industry. In many cases the same factors affect firms in other industries. Economic and Financial climate, Political Stability, Legal system, Administrative Structure and Government policy, and the Infrastructure are common factors for all firms. Many researchers have studded the effect of some or all of these marketing variables (Birnleitner, 2014); (Birnleitner, 2014); (Krais, et, al., 2010); (Khrawish and Siam, 2010); (Azzam and Wadi, 2008); (Al-Khouri and Al-Qudah, 2006).

2-1-2: Economical and Financial Environment Economic stability is a major drive which can facilitate the inflow of Foreign Direct Investment FDI to any country; stability represents predictability and the opportunity for enterprises to gain better foresight into the future. Economic instability can also contribute to hyperinflation, which can render the currency virtually obsolete. Additionally, economic growth and FDI can start a "success domino effect." The more the region attracts FDI the more it grows and the more investors are willing to provide FDI. Also the more FDI flows into the country, the greater the economic chain reaction, providing a positive effect to sustain such growth. One aspect of economic derive is the openness to the regional and international trade, market openness serves several important roles in attracting FDI, of critical importance is a business' ability to sell its products and services to both local and foreign markets. Trade barriers is another aspect, example is the tariffs which is typically viewed as disincentives by other nations. An American product that is subject to high tariffs in Jordan will be less in demand in the Jordanian market due to the artificially inflated price. Such actions typically prompt retaliatory tariffs from the U.S. on Jordanian products, or in certain extreme cases, an outright ban on certain goods and services. It is notable that export friendly policies, then, can play a major role in deciding whether to invest in a particular country or not, especially for enterprises that have a large portion of their anticipated market shares located outside of the local market. In efforts to create a more business-friendly environment, regional and international free trade agreements are typically

13

initiated by market-progressive governments as reasonable mechanisms for inducing economic activity and growth. Financial stability is another major determinant of FDI inflow in the host country’s economy, as any form of instability introduces a form of uncertainty that distorts the investor’s perception on the future profitability in that country. (Bekhat and Smadi, 2014) Again to say that it is something notable that developing countries greatly depend on foreign direct investment (FDI) to promote their economies and domestic markets, and they are continually trying to attract foreign investment through the implementation of attractive tax policies and other tax measures because ‘‘private international capital flows, particularly foreign direct investment, along with international financial stability, are vital complements to national and international development efforts. Emerging economies are not self-sustaining, and foreign investment constitutes a large source of revenue. (Pisani, 2008) The most common form of the financial incentives which countries usually offer to the foreign investor is the tax exemptions, means the investors are exempted from paying the tax for their business in the host country for a specified time period or as long as their investments continue. Here the local governments has to assure that tax policies must be established for the long run but not for the sort one; a policy that is seen as temporary may have little effect to attract investments. In the developing countries, the goal would be to implement lasting tax policies that guarantee foreign business investment can be stable and profitable. The advantage of tax incentives that is can make a difference because governments can quite easy to change or modify or extend tax rate, while other factors influencing change investments are less flexible and it would not be achieved so easily and would consume more time, usually very important in making any decisions. The effect of tax incentives on the attracting Foreign Direct Investment is undeniable. Especially in recent years, tax rates and tax incentives are influencing corporate location decisions within regional economic groups, the European Union free trade zone in North America is an example, South Asian Nations Association is another example. Similarly, in the U.S., incentives can play a decisive role in the decision of choosing the final location where to

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place their investments and where to establish their companies since the choice is limited to a small number of locations with similar characteristics. Countries have to choose the appropriate fiscal instrument for attracting the investments. In developed countries for example, a popular tax incentive is to eliminate corporate income tax for some time by "tax exemptions" or exemptions / reductions for certain types of investment companies. Another measure is to quickly recover costs of investments for all or only those investments that the government wants to promote, through deductions or tax credits, this can take many forms; first is accelerated depreciation, which allows companies to fully amortize capital faster than through taxation by accounting, another is tax cuts for investment expenditure, which enable companies to recover a percentage of investment expenses from taxable income or investment tax credits, this also allow companies to reduce taxes paid by a percentage of their investment expenditures. Last is the tax relief for investment limitations are especially for projects with long gestation periods. Some countries have chosen to reduce the effective rate of corporate income tax for all companies. Small economies such as Hong Kong (China), Lebanon, Mauritius have chosen this option. International investors looking favorably to a country with low tax statutory rate which gives the signal that the government is interested to let the market determine what is most profitable investment. But this approach can reduce tax revenues, at least for a transitional period (long term can simplify the tax system to attract more investors, which may increase the tax base effect can offset the initial reduction). (Nuta and Nuta, 2012) Customs Tariff is another tool that can play a role in attracting Foreign Direct Investment FDI; customs modernization becomes more and more important to each country's interest in attracting foreign direct investment. As tariff barriers fall, multinational and other companies look increasingly to the existence of business friendly policies in deciding where to invest. Countries that fail to keep pace with world class standards for customs administration will find that investors simply cannot afford the high logistics costs imposed by customs inefficiencies. Finance ministers in these countries will find foreign direct investment (FDI) migrating to nations with more sophisticated customs administrations. Moreover, customs inefficiency imposes a significant tax, hidden but very real, on consumers and traders - taxes whose

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"revenues" are not realized by the government, but rather comprise a dead waste to the economy. (ICC, 1999) Other financial tools rather than taxations system are the absence of exchange controls, and of any limitations on the repatriation of capital, profit and salaries transfer, as well as the existence of a strong and profitable banking sector, availability of reliable supply of water and energy, and the low cost of energy and electricity. A weaker real exchange rate might be expected to increase vertical FDI as firms take advantage of relatively low prices in host markets to purchase facilities or, if production is reexported, to increase home-country profits on goods sent to a third market. Froot and Stein (1991) find evidence of the relationship: a weaker host country currency tends to increase inward FDI within an imperfect capital market model as depreciation makes host country assets less expensive relative to assets in the home country. Blonigen (1997) makes a “firmspecific asset” argument to show that exchange rate depreciation in host countries tend to increase FDI inflows. But on the other hand, a stronger real exchange rate might be expected to strengthen the incentive of foreign companies to produce domestically: the exchange rate is in a sense a barrier to entry in the market that could lead to more horizontal FDI. However, this hypothesis does not appear to have attracted much support in the empirical literature. (Walsh and Yu, 2010)

2-1-2-1: Economical and Financial Environment in Jordan Reform of Jordan’s financial and economic system implemented in the late 1980s and early 1990s with the support of the International Monetary Fund and the World Bank, this have successfully increased the size and depth of Jordan’s financial system. The reform also happened in financial regulatory and supervision framework; in comparison to other Middle East and North Africa MENA countries Jordan has also enhanced financial regulatory system. Jordan's liberal foreign exchange law entitles foreigners to remit abroad all returns, profits, and proceeds arising from the liquidation of investment projects. Non-Jordanian workers are permitted to transfer their salaries and compensation abroad. The Jordanian Dinar (JD) is

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fully convertible for all commercial and capital transactions. Since 1995, the JD has been pegged to the U.S. dollar at an exchange rate of approximately JD1 to $1.41. The Central Bank of Jordan (CBJ) supervises and licenses currency exchange businesses. These entities are exempt from paying commissions on exchange transactions and therefore enjoy a competitive edge over banks. Other foreign exchange regulations include: (www.state.gov, 2013) 

Non-residents are allowed to open bank accounts in foreign currencies. These accounts are exempted from all transfer-related commission fees charged by the CBJ.



Banks are permitted to purchase unlimited amounts of foreign currency from their clients in exchange for JDs on a forward basis. Banks are permitted to sell foreign currencies in exchange for JDs on a forward basis for the purpose of covering the value of imports.



There is no restriction on the amount of foreign currency that residents may hold in bank accounts, and there is no ceiling on the amount residents may transfer abroad. Banks do not require prior CBJ approval for a transfer of funds, including investment-related transfers. However, stricter measures are now in place to monitor wire transfers in accordance with Jordan's efforts to deter illicit cash flows. Jordan’s trade policy is geared towards integration into the world economy. Jordan acceded to the World Trade Organization (WTO) in 2000 and ratified a free trade agreement with the United States in 2001 and an association agreement with the European Union in 2002. It also established export platforms providing incentives for foreign investment. (Louzi, 2013) Also Jordan gone so far in promoting its legislation to make the foreign direct investment more stable and to assure the investors their investments are safe and the economy of Jordan is going treat their investment fairly. For example Jordan is the first Arab country in the Middle East to have adopted national legislation on competition. Also in 2002, Jordan enacted the provisional Anti-Trust Law which was replaced in 2004 by the Competition Law. It regulates anti-competitive practices, abuse of dominant positions and mergers and acquisitions. The provisions of the Competition Law apply to all production, commerce and service activities, as well as any economic activities occurring outside Jordan that have an effect within the Kingdom. Three authorities deal with competition matters: the Competition Directorate, the Competition Affairs Committee and the judiciary.

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Jordan has step ahead in protecting the rights of the investors. Jordanian law has stipulates that expropriation is prohibited unless deemed in the public interest. But in cases of expropriation the law also mandates the provision of fair compensation to the investor in convertible currency. Privatization program was launched in the med-1990s, the program aimed at restructuring and privatizing state-owned enterprises. As a result of this program the “2000 Privatization Law” has been approved by Jordan’s government and results in establishing the Executive Privatization Commission (EPC). Since 2000, EPC has successfully completed more than 70 transactions yielding considerable proceeds and leading to sizeable investments. The completed transactions which include over nine major projects involved partial and total restructuring of the relevant sectors. They covered an array of vital sectors such as mining, civil aviation, telecommunications and electricity. Up to end 2008, total privatization proceeds amounted to over USD 2.2 billion. (www.jic.gov.jo, 2016) Also Jordan is involving in more than fifty three investments agreements, those have been already signed. Also negotiation with other countries is going on for new trade agreements and for tariff reduction. Some of these agreements have been negotiated or signed concomitantly with free trade agreements (United States, Canada and Singapore), unlike recent practice to include investment provisions in FTAs. Regionally, Jordan also signed investment-related agreements, in particular the 1980 Arab League Unified Agreement for Investment, many other agreements also signed, one example is Agadeer agreement. The researcher defines the Economical and Financial Environment in the term of Foreign Direct Investment (FDI) as the economical and financial incentives and burdens structured by the local governments in order to encourage and attract these foreign direct investments and to assure the stability and lasting of these investments to their own countries.

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2-1-3: Legal Environment Investment decision is usually affected by many variables; one of these variables is the transparency of the information on how governments implement and change rules and regulations those deal with investment. Transparency and predictability are so important for the foreign direct investors and especially important for small and medium sized enterprises that tend to face particular challenges to entering the formal economy. It is also important for foreign investors who may have to function with very different regulatory systems, cultures and administrative frameworks from their own. A transparent and predictable regulatory framework dealing with investment helps investors and businesses to assess potential investment opportunities on a more informed and timely basis, shortening the period before investment becomes productive and profitable. (www.jic.gov.jo, 2016) Transparency and predictability has a huge benefit in attracting foreign direct investment to the host country, it also can help governments to achieve greater efficiency. Transparency provisions have also been enshrined in virtually all modern international investment agreements, including the agreements of the WTO, regional agreements such as the NAFTA and most bilateral investment treaties of recent vintage. Governments can promote investment by consulting with interested parties, making the law and regulations those control the investment so simple, codifying legislation, using plain language drafting but not the local language, English is most coming language in the business world. Developing registers of existing and proposed regulation, expanding the use of electronic dissemination of regulatory material, and by publishing and reviewing administrative decisions, also through hiring an expert people who can convince and deal with all investment affairs. (OECD, 2013) It is also something important that governments implement laws and regulations of the intellectual property rights and effective enforcement mechanisms, this protection of property rights can help to encourage innovation and investment by domestic and foreign firms. Also governments have to take steps to develop strategies, policies and programs those can meet the needs of both domestic and foreign investors.

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Property Rights is something that government can’t just ignore or show carless behavior toward it, there are many advantages for the Property rights protection, for example it can give the businesses an incentive to invest in research and development, and this will ultimately lead to the creation of innovative products and processes. It also gives the holders of such rights the confidence to share new technologies to other partners or joint ventures in host country. Successful innovations can bring higher productivity and growth. Investment is thus, both a precondition for the creation and diffusion of innovation activity. Because all of that the property right protection can be considered as an instruments used by governments to encourage investment in research and development include patent and copyright laws, which give the owner, for a pre-determined period of time exclusive right to exploit the innovation. How effective these instruments are in terms of encouraging investment in innovation activity also depends on how well the rights are enforced and protected. (www.jic.gov.jo, 2016) Other aspect of the legal concerns which governments have to take care is the dispute settlements, it have to ensure a widest possible scope of protection at a reasonable cost, also the system of contract reinforcement has to be widely accessible to all investors. It is something important the investors have trust in the integrity of the markets, because at the end it is only the possibility of buying and selling assets through market transactions that reveals the value of an asset. It is, therefore. As a central pillar of any system, this requires a legal framework, capable of ensuring the enforcement of contracts, the protection of property rights and the resolution of disputes. Other issue sometimes appears is the costly and long time period of litigations in the courts which might cause in discouraging potential investors. Confidence in the integrity of markets can also be favored through the development of alternative dispute settlement procedures, such as arbitration, mediation and conciliation hearings organized by industry bodies or specialized agencies. These are particularly useful options for settling disagreements, at least at the first instance level, between transacting parties at a reasonable cost. (www.jic.gov.jo, 2016) Non-discrimination has to be considered as a general principle for all governments in understanding laws and regulations of the investment. In the exercise of its right to regulate and to deliver public service, the governments have to put a mechanism in place to ensure

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transparency. Governments must reviewed restrictions affecting the free transfer of capital and profit and their effect on attracting foreign direct investment. The concept “National Treatment” provides that a government treat enterprises controlled by the nationals or residents of another country, no less favorably than domestic enterprises in like situation. Non-discrimination exactly means that an investor or investment from one country is treated by the host country “no less favorably” with respect to a given subject matter as an investor or investment from any third country (referred to as Most Favored Nation or MFN in international agreements) in like situations. If the government fallen in such discrimination mistake this could have badly damage results in attracting foreign direct investment to the host country. Policies that favor some firms over others (i.e. any policies that derogate from national treatment or MFN) involve a cost. They can, for instance, result in less competition and efficiency losses, thereby damaging the investment environment. For this reason, exceptions to non-discrimination need to be evaluated with a view to determining whether the original motivation behind an exception (e.g. protection based on the infant industry argument) remains valid, supported by an evaluation of the costs and benefits. (OECD, 2013)

Another legal incentive to foreign direct investment is the Arbitrations system. One of the main concerns of the foreign investors is the channels through which disputes are heard and resolved. Notably that most of the international investment agreements contain provisions by which governments consent to permit investors to seek the settlement of investment disputes with the host country government through binding international arbitration. Such kind of commitments provide an additional layer of protection to investors and most importantly it is a signal a government’s commitment to the rule of law, giving the necessary confidence to investors that their property rights are secure. (www.jic.gov.jo, 2016)

2-1-3-1: Legal Environment in Jordan Jordan’s legal investment regime is governed by a series of laws and regulations: the interim Investment Law No. 68 of 2003, which contains general provisions for treatment and

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protection of investment and describes procedures to benefit from incentives and obtain licenses; the provisions on sectors, incentives and exemptions of the Investment Promotion Law No. 16 of 1995; Regulation No. 54 of 2000 which lists some sectors that are restricted to foreign investment; and the interim Law No. 67 of 2003 which deals with the organization of the Jordan Investment Board. (www.jic.gov.jo, 2016) Jordan's current investment laws treat foreign and local investors equally, with the following exceptions: (www.state.gov, 2013) 

Ownership of periodical publications is restricted to Jordanian citizens or entities wholly-owned by Jordanians.



Foreigners are prohibited from wholly or partially owning investigation and security services, sports clubs (with the exception of health clubs), and stone quarrying operations for construction purposes, customs clearance services, or land transportation services. The Cabinet, however, may approve foreign ownership of projects in these sectors upon the recommendation of the Investment Promotion Committee, comprised of senior officials from the Ministry of Industry and Trade, Income Tax Department, Customs Department, the private sector, and the Jordan Investment Board. To qualify for exemption, projects have to be deemed by the Prime Ministry as highly valuable to the national economy and must employ a large number of Jordanians.



Investors are limited to 50 percent ownership in a number of businesses and services, including printing/publishing companies and aircraft or maritime vessel maintenance and repair services. Jordan’s law implies that foreign investors may seek third party arbitration or an internationally recognized settlement of disputes. The Jordanian government recognizes decisions issued by the International Center for the Settlement of Investment Disputes (ICSID), of which Jordan is a member state. A small number of cases between mostly foreign investors and the Jordanian government have been brought before ICSID tribunals. Jordan is also a member of the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards. In cases where the government (or its agencies) is a party to the dispute, Jordan generally prefers settlement in local courts if an out-of-court settlement is not forthcoming. Jordan abides by WTO dispute settlement mechanisms, and dispute settlement mechanisms under the U.S.-Jordan FTA are consistent with WTO commitments. Article IX of the United

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States-Jordan Bilateral Investment Treaty (BIT) establishes procedures for dispute settlements between Jordanians and Americans. The Commercial Code, Civil Code, and Companies Law collectively govern bankruptcy and insolvency. A temporary bankruptcy law was enacted in 2002 and remains in effect. A new Insolvency and Bankruptcy draft law is currently pending Parliamentary review. (www.state.gov, 2013) In Jordan’s efforts to fight corruption Anti-Corruption Committee ACC will start implementing the second pillar of the 2013-2017 national anti-corruption strategy, which seeks to promote preventive measures and spread awareness against corruption by reaching out to schools, universities and religious leaders. The official noted that the ACC seeks to activate internal monitoring units at public institutions as the first defense against corruption, adding that the commission will issue a detailed report of this year’s corruption cases regularly. (The Jordan’s Time Newspaper, 2014) Jordan is active signatory of “bilateral investment treaties” with fifty three agreements signed. Also Jordan is a member of the International Centre for the Settlement of Investment Disputes and the vast majority of signed bilateral investment treaties provides for access to international arbitration. For example, the 2001 Arbitration Law and the 2006 Mediation Law reflect Jordan’s willingness to promote alternative dispute resolution mechanisms. Here below some of the legal aspects that government of Jordan is involving in. (OECD, 2013): 1- Anti-corruption policies: Are pursued by Jordan which ratified the United Nations Convention against Corruption in 2005. The Anti-Corruption Commission Law was enacted in 2006 and amended in 2012. Anti-corruption policies are critical for the confidence and decisions of all investors and for reaping the development benefits of investment. Jordan was one of the first Arab countries to ratify the United Nations Convention against Corruption (UNCAC) in 2005. The Anti-Corruption Commission Law was then drafted and enacted in 2006. The Jordan Anti-Corruption Commission (ACC), which started operations in 2008, developed a National Anti-Corruption Strategy for 2008-2012 to combat corruption and pursue perpetrators. The Law was amended in

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2012 to expand the Commission’s scope and provide provisions for protecting witnesses and whistleblowers.

2- Competition policies: Jordan is the first Arab country to have adopted a Competition Law in 2004. Nevertheless, the institutions in charge suffer from lack of adequate resources, and weaknesses in the legislation enforcement are reported.

3- Human rights: Jordan has ratified six major United Nations conventions dealing with human rights, with reservations in two cases. The National Centre for Human Rights (NCHR), established in 2006, should verify that human rights are being observed in the Kingdom, propose legislation related to the Centre’s objectives, organize training courses, issue statements, conduct studies and research, organize outreach activities, and establish a database of information related to human rights. NCHR has international and national credibility but suffers from ineffective co-ordination and lack of resources. Stakeholders mentioned that there is a need to update human rights laws because they do not comply with international agreements.

4- Employment and industrial relations: Jordan has ratified the eight fundamental ILO labor conventions, except the one on freedom of association and protection of the right to organize. The 1996 Labor Code governs all labor affairs and has had several amendments, including giving more weight to social dialogue. Established in 1954, the General Federation of Jordan Trade Unions includes all 17 trade unions in Jordan. The legal and institutional framework has been reinforced, an ambitious national strategy (the National Employment Strategy for 2011-20) has been launched, and programs supported by international organizations have had a significant effect but several challenges remain. 5- Environmental Protection Low: In the mid-2000s, Jordan developed a legal and institutional framework to protect the environment. As regards the recommendations of the Guidelines, it should be noted that the Environmental Protection Law (2006) made environmental impact assessments (EIAs) mandatory for any companies with activities that bear on the environment. The Development Zones Commission (DFZC) has also

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made a Strategic Environmental Assessment an obligatory requirement for each new free zone and implemented conducive process for starting new businesses which includes environmental clearance. The government is monitoring the activities of firms through its Royal Department for Environmental Protection that inspects industrial facilities to check their abidance by environmental regulations. The government is also implementing a number of initiatives to encourage companies to adopt energy efficiency practices, water conservation and low-carbon buildings among other environmentally-friendly practices. 6- Combating bribery: Bribe solicitation and extortion Jordan has set up a legal and institutional framework to combat corruption. The researcher defines the Legal Environment in term of Foreign Direct Investment (FDI) as the laws and regulations set by the local governments in the aim of encouraging and attracting Foreign Ddirect Iinvestment (FDI) to their countries, and to ensure stability and lasting of these investments. This includes the attractiveness and appropriate of this legislation and its clarity and ease, and the availability of specialized courts and competent judicial justice.

2-1-4: Political Environment One of the main characteristic of Foreign Direct Investment is that once an investment made in a particular country, a foreign investor cannot prevent the government in that host country from changing the political environment in which the investment decision was made at first. Attempts have been made to establish international tribunals or contracts between multinational corporations and the host countries but the fact that it is almost impossible to enforce it. The countries with high degree of political instability or poor legal protection of assets, or generally exhibit high rates of expropriation and this makes investment less attractive. Expropriation has many forms; a direct act of expropriation involves nationalization of foreignowned corporations, in which the government simply takes control of the capital stock. The other is the indirect forms of expropriation that multinational corporations face.

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Basically, the more political instability there is the less attractive and more costly it becomes to invest in those particular countries. It doesn’t mean there won’t be any FDI; it just means firms will require a higher return to compensate for the increased risk involved. There are many reasons why political situation is going to be important for determining whether investing in a particular country is a good idea or not: (Hajzler, 2010) 1- Risk of terrorist action: Cost of equipment, cost in terms of lives, Difficulty of getting workers to go and live in that country. 2- Future attitude of government cannot be guaranteed: Possibility of ultra nationalist government being formed which seeks to nationalize national reserves then the investor loses everything. 3- Political instability can cause a run on the exchange rate: e.g. political instability contributed to collapse of Russian rouble in the early 1990s. This made investing in Russia economically difficult. 4- Firms require investment and good infrastructure to make FDI worthwhile: Political instability means that the country is likely to face problems raising taxes and investing in roads and communication etc. 5- Expropriation: Is a common form of political risk where a host-country government

seizes a company’s assets without fair compensation, and is a frequently cited barrier to foreign investment in many developing countries. Another opinion says that Political influences affect businesses in two main ways; first, political parties have policies that are often put into legislation, which clearly must be obeyed. Second, the ruling party sets the general tone of behavior in the country as a whole and in government departments in particular. This subtle change in the national culture will also affect business. The political environment is usually regarded as including the regulatory environment, whether such regulation emanates from the government or from industry-based bodies. Some examples of government controls in business are as follows: (Blythe, 2014) 1. Patent legislation: Governments set the rules about what may and may not be patented and for how long. In high-tech industries such as bioengineering or software design, intellectual property may represent the bulk of the firm’s assets. Changes in

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patent (and copyright) law can have profound effects. This is particularly an issue in the international arena, since there is no such thing as a world patent: products must be patented in each country separately, and in some countries (notably Taiwan) few products are patentable, so that companies are left open to having their products copied at a fraction of the cost of the ‘genuine’ product. 2. Taxation: Apart from the general taxation regime on corporations, governments often impose selective taxation on specific products in order to manage demand and raise revenue. This is particularly a problem in the alcoholic drinks industry and the tobacco industry, but in recent years changes in the classification of different products in respect of VAT has had a marked effect on some firms. As with patent legislation, taxation varies from one country to another and therefore firms need to be particularly careful when entering foreign markets. 3. Safety regulations: Products need to conform to national safety regulations. Within the EU many attempts have been made to co-ordinate the wildly differing safety laws in the member states, but to no avail: finally, the EU has adopted the stance that any product that is legal in one member state will be legal in all member states unless the governments concerned can demonstrate that there is a very real danger to human or animal life. 4. Contract law: Governments can, and do, amend contract law although much contract law is developed through the decisions of law courts. In the UK, contract law is looser than it is in the United States: in America the written agreement is the basis of the law, whereas in the UK verbal contracts are as binding as written contracts. There is, of course, the problem of proof in the case of verbal contracts. The main area of government intervention in contract law has been in the field of consumer protection, where the contract between the consumer and the retailer is often regulated to compensate for the perceived imbalance of power between individual consumers and large companies. 5. Consumer protection legislation: Apart from contract law, mentioned above, governments often enact legislation designed to protect consumers. In the UK there are several hundred laws relating to consumer protection, covering everything from credit agreements to the quality of goods sold. In general, the old principle of caveat

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emptor (let the buyer beware) is no longer necessary since retailers are required to ensure that goods are of a suitable quality for the purpose for which they are intended, are being sold at prices that are transparent and reasonable, and can be returned if they are faulty or (often) when the customer changes his or her mind. 6. Control of opening hours: In the UK, the opening hours of retail shops are limited only on Sundays, when shops may open for six hours only (with exemptions for small businesses). In other countries tougher restrictions apply: in particular, retail hours in Germany are still heavily limited by law. In the past the opening hours of German retailers were even more restricted, the net result of which was the development of one of the largest mail order markets in the world.

2-1-4-1: Political Environment in Jordan Jordan was not immune from the dramatic events taking place in the Arab region, Syria, Iraq, Egypt, Yemen, and Palestinian – Israeli conflict. Also 2012 witnessed numerous, although largely non-violent demonstrations. These demonstrations were well managed by Jordan’s authority and fortunately Jordan has succeeded to remain peaceful. The royal family of Jordan has successfully led the country to be one of top countries politically staple in the region, good international relations, moderate political polices, democratic parliament elected directly through the citizens, and many other signs of political stability. This all gave the confidence and built the ground to attract the investor to Jordan. On the political reform path, the government has started formulating a detailed and gradual plan to activate the role of the Ministry of Defense so that it pursues political, economic, social and logistical tasks related to national defense. The political reform path also requires enrooting local governance by first completing the municipalities and decentralization laws and then moving on to the Elections Law, in addition to continuously developing the working mechanisms of the House of Representatives, which include its internal bylaws, adopting a code of conduct and institutionalizing the work of parliamentary blocs on partisan and platform basis. (Jordan Investment Commission, 2016)

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The researcher defines the Political environment in the term of Foreign Direct Investment (FDI) as the nature of the political system in the host countries and its stability, and the impact of this stability on encouraging and attracting of Foreign Direct Investment (FDI) to the country.

2-1-5: Infrastructure Empirical evidence indicates that availability of necessary infrastructure in the host country positively affect Foreign Direct Investment FDI inflows, at the same time a firm’s investment decision is likely to be influenced by the traditional location pull factors such as the capacity of the host country to absorb the multinationals product, purchasing power of the population indicated by gross domestic product per capita (GDPPC) and sound macroeconomic environment to enable the multinational to optimally utilize its resources. Similarly, the recent economic constriction in the developed world has limited their ability to invest abroad; enhancing the competition among the developing world to lure them to invest in a particular host, hence focus on factors affecting their investment decision in a developing country seems suitably well-timed. Thus, it is important to continuously understand, explore, and grasp the existing and possible new factors that may influence FDI flows to the developing nations. (Shah, 2014) Also the supportive infrastructure play an essential role in attracting foreign direct investment FDI, this include the availability, quantity, and quality of the infrastructure, all are essential for the smooth functioning of multinational’s affiliate production and trade activities in any host country. In general better infrastructure can significantly reduce overhead costs and thereby positively affect investor’s location decision; at least, if infrastructure functionality alone is not multinational’s engine of production, it for sure is their wheel of economic activity in the developing countries. When looking at the infrastructure indicators, we focus on public expenditure in infrastructure by type and province, and some infrastructure stock variables, namely fixed telephone and mobiles, internet, energy production capacity, airports, sea ports, railways, roads,

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fleet of cargo transportation, advanced banking sector, services and consulting sector, and many other items which are necessary to conduct the logistics and operation tasks of foreign direct companies in host country. A number of scholars have acknowledged the importance of infrastructure in stimulating FDI. They include Wheeler and Mody (1992), Loree and Guisinger (1995), Richaud et al. (1999), and Asiedu (2002, 2006). These authors have argued that good infrastructure is necessary for foreign investors to operate successfully. Poor infrastructure or unavailable public inputs increase costs for firms. Thus, to the extent that the public input is non-excludable and noncongestible, it will lower the costs of doing business for profit maximizing multinational and indigenous firms alike. A good infrastructure should therefore improve the investment climate for FDI. (Seetanah and Khadaroo, 2009)

2-1-5-1: Infrastructure in Jordan Jordan’s government indicators shows well-developed infrastructure. Access rates are virtually 100% for transport, electricity, water supply, sanitation facilities and mobile telephone subscriptions, access to the Internet actually above the Arab regional average. The quality of its air transport infrastructure, electricity supply and roads is particularly good by international standards. (OECD, 2013) Jordan’s geographical location acts as a regional entry point, being connected to neighboring countries and global markets through modern transportation and communication networks. The country shares land borders Syria, Israel, Palestinian territories, Saudi Arabia, Iraq, with Egypt is only a ferry ride away. Also Jordan serves as a focal point for trade and investment within the Middle East and North Africa region (MENA), particularly for the Iraqi and Gulf markets where it offers access to over 1 Billion consumers through its trade agreements which aim to create favorable conditions for the development and diversification of trade and to promote commercial and economic cooperation in areas of common interest on basis of equality, mutual benefit, nondiscrimination and international laws. Jordan’s location allows for diversification and expansion into increasingly affluent markets. Below tables highlight some indications about the

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infrastructure in Jordan, Table (2-1) shows the transportation data as per 2014 and Table (2-2) shows the Telecommunications Capacity in 2014. (www.jic.gov.jo, 2016) Table (2-1): Transportation Data for the Year 2014 Transportation 2014 Railway

510 km

Highway (2014)

7299 km

Seaway Capacity

22 m tons

Total Airports(8)

Civil Airports include: Queen Alia International Airport, Makra Airport, Aqaba King Hussein International Airport

Runway Length(s)

majority of them having runways longer than 3660 meters

Source: Ministry of Public Works and Housing; Civil Aviation Authority, 2015 

55 directly served destinations and 700 served by alliance airlines.

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Multi-million dollar investment toward upgrading the cargo terminal at Queen Alia Airport



The new QAIA terminal provides high standards for what passengers value most including: ample Food & Beverage and shopping areas, children’s play areas, clear signage, sufficient flight information screens, comfortable seating in waiting areas, and high levels of service at the customer assistance counter.

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International standards for the Aqaba Container terminal managed by APM terminals which are the only Jordanian container terminal.

 

Railway master plan to develop an extensive rail network. Queen Alia International Airport (QAIA) is the rehabilitation of the airport’s facilities, and the construction of the new passenger terminal with a total capital commitment of

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US$ 850 million. QAIA is expected to increase annual passenger capacity from the initial 3.5 million to 9 million in phase one, and to 12 million in phase 2. 

Aqaba New Port Project is strategically positioned to serve Jordan’s captive market, the Levant, and the re-construction efforts in the Middle East. In order to leverage new business opportunities, it will also offer industrial land adjacent to the New Port.



The New Port of Aqaba will comprise 3 distinct new terminals that will be located in a large basin created by dredging the foreshore, and they include the General Cargo and Ro-Ro Terminal, the grain Terminal and the New Ferry Terminal.

Table (2-2): Telecommunication Capacity in 2014. Telecommunication Capacity 2014 Number of Mobile subscribers

10.3 million

Number of Fixed Line Subscribers

378,000

Number of Internet Users

5.3 million

Number of Postal Services Offices

356

Source: Telecommunications Regulatory Commission, 2014. 

Deregulated telecommunication market since 2005



100% Access to Internet according to the Telecommunications Regulatory Commission (TRC) statistics since 2012.

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Massive growth of broadband and wireless networks

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Tech-savvy population

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The Networked Readiness Index 2014 rankings (Global Information Technology Report 2014) Jordan comes 6th place in comparison to Arab Countries with a score of 44 out of 144.

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Jordan has one of the most open telecommunications markets in the Middle East and an independent regulator. According to the 2013 Spring Pew Global Attitudes Survey, Jordan was ranked among the countries where smartphone ownership is high, as 38 per cent of mobile holders have smartphones, as opposed to 23 per cent in Egypt, 12 per cent in Tunisia, 23 per cent in Russia, 17 per cent in Turkey and 37 per cent in China.

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The researcher defines the Infrastructure in term of Foreign Direct Investment (FDI) as the availability of the appropriate infrastructure which is necessary to attract and encourage Foreign Direct Investment (FDI) to the host countries. This includes the availability of roads, railways, airports and sea ports, transport fleet those necessary for the logistics operations. Also the availability of advanced service sector which include customs offices, chamber rooms, labor offices, banks and consulting centers, and any other institution which is necessary to facilitate the industries sector. Also the suitability of countries’ geographical location to encourage and attract Foreign Direct Investment (FDI) in terms of its proximity to the international markets.

2-1-6: Administrative Structure and Procedural Aspects Institutions in the form of formal rules, informal constraints and the enforcement characteristics of both have both positive and negative influences and effects on behavior of foreign direct investors. Institutions govern and influence behavior in economic activities; they will spell out what is fair, legal, wrong or right in a society. Institutions do liberate behavior and provide order in an economy; they make behavior for parties in a transaction predictable thereby reducing mistakes, conflicts and transaction costs. The existing and non-existing institutions may have profound effects on economic performance. Change in rules, laws and regulations (institutional change) intend to influence behavior change. Institutional reforms are aimed at creating opportunities and agents in an economy are expected to respond positively to these reforms so as to maximize the opening opportunities. Institutional reforms are conceptualized as among the important FDI determinants that would lead to attraction of more FDI inflows. (Ngowi, 2005) Furthermore, institutional quality is a likely determinant of FDI, particularly for lessdeveloped countries, for a variety of reasons. First, good governance is associated with higher economic growth, which should attract more FDI inflows. Second, poor institutions that enable corruption tend to add to investment costs and reduce profits. Third, the high sunk cost of FDI makes investors highly sensitive to uncertainty, including the political uncertainty that arises from poor institutions.

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To implement the policies of FDI consistently and effectively, governments need to build institutions to address market failures associated with the process of FDI and development. For instance, investment promotion agencies may address information related market failures by providing potential investors with information required to make the investment. In order to effectively improve the potential for FDI-inflows the host-country government could try to reduce the amount of bureaucratic corruption. By making the punishment more severe, the expected cost of engaging in corruption should increase and thereby reduce the amount of corruption. Further this does not bring about any additional costs for the home government. Efforts can also be made to increase the effectiveness of corruption investigations; this might actually harm the fight against corruption since the increase in punishment can be seen as nothing but cosmetics. The culture variable can be seen as exogenous and therefore difficult to affect in the short run. (Johnson, 2004) Need to notice here that corruption is an important problem that can be an obstacle in face of attracting foreign direct investment or even lead to dis-stability and leaving the host country to another transparent economy. Corruption arises as a result of a lack of functioning market economy institutions, it also leads to increase costs for operating in the host-country. Increasing costs caused by corruption would tend to discourage investors from entering, resulting in smaller inflows of FDI. (www.jic.gov.jo, 2016) Arbitrariness is a reason or cause for bureaucrats. When formal institutions are underdeveloped or cannot be enforced the influence of government bureaucrats increases. When institutions fail to restrict the behavior of bureaucrats these individuals have the opportunity to develop informal institutions that include corrupt behavior. Arbitrariness in interpreting and enforcing laws and regulations creates an uncertainty that bureaucrats can take advantage of in order to extract monetary gains for themselves. Arbitrariness allows bureaucrats to interpret regulations and laws in a way that put MNEs as well as domestic firms at a disadvantage when interacting with bureaucrats. Opportunities for bureaucratic corruption might even be the very reason for establishing arbitrary and confusing regulations. (www.jic.gov.jo, 2016)

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The more the government invests in Human Research and Development (HRD) the more it can influence the behavior of employees and can participate in human resource development through providing the right framework of policies, institutions and support services? Notably that countries that are part of a global competitive network, which forces them to remain competitive, appear to have more incentives to invest in training and education and will employ more skilled workers and employees, and are also more likely to introduce the latest technology and to use more skilled workers.

2-1-6-1: Administrative Structure and Procedural Aspects in Jordan Jordan has made several regulatory reforms to comply with its international commitments, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and the Jordan-US FTA. Reforms and commitment to intellectual property protection also respond to external demands, notably from major foreign companies investing in the pharmaceutical and IT (information and technology) sectors. OECD, 2013) Corruption can destroy the reputation of any country willing to bring in the foreign investor and can give a bad sign that investments stability and profitability can be in big risk. Jordan government has noticed this fact and accordingly set up a legal and institutional framework to combat corruption, in particular the 2012 amendments to the Anti-Corruption Commission Law. One of the steps Jordan done to facilitate and enhance the performance and reduce the time of clearing the imports and exports in to/from Jordan is the implementation of new software by customs authority allowing online submissions of customs declarations and the introduction of X-ray scanners for risk management systems have reduced the customs clearance time to two days for exporters and three days for importers. Pre-clearance of the imported materials are also possible now. The researcher defines the Administrative Structure and procedural aspects in term of Foreign Direct Investment (FDI) as the way government agencies and officials behave and

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achieve the daily work, and how far it shows an efficiency and professionality in conducting the work of Foreign Direct Investors.

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2-2: Foreign Direct Investment (FDI) 2-2-1: Introduction 2-2-2: Definition of Foreign Direct Investment (FDI) 2-2-3: The importance of Foreign Direct Investment (FDI) 2-2-4: Determinants of Foreign Direct Investment (FDI) 2-2-5: Barriers to Foreign Direct Investment (FDI) 2-2-6: Removing Barriers to Foreign Direct Investment (FDI)

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2-2-1: Introduction Over the past decades, foreign direct investment FDI has become a major source of funding for capital projects in the majority of world economies. FDI is defined as a capital provided by an overseas investors to an enterprise or project in another country with the purpose of acquiring long-term interest in the venture. FDI plays a vital role in economic growth, especially in developing countries suffering from scarcity of capital investment and limited resources which affect their economies. FDI is used to stimulate and wax economic growth and more necessary capital, technology and skills to facilitate higher levels of productivity. (Bekhet and Smadi, 2014) Furthermore, FDI is considered a key to entry to the global markets, access technology, skills, and a way to achieving global strategic targets and responding to market opportunity through the FDI of multinational enterprises MNEs. However, policymakers of many countries especially those with developing economies, strive to encourage FDI by providing incentives to MNEs to establish plants or companies in their countries due to numerous positive effect that can bring FDI to the host countries. A part from the direct benefit of an increase in the amount of capital in the host country, FDI can also cause spillover effects of benefit to the host developing countries through: (Bekhet and Smadi, 2014) -

Technology transfer.

-

The introduction of new processes.

-

Managerial Skills.

-

New jobs and employee training.

-

International production networks.

-

Access to market.

2-2-2: Definition of Foreign Direct Investment (FDI) According to benchmark definition of FDI, fourth edition, 2008 direct investment enterprises are corporations, which may either be subsidiaries in which over 50% of the voting power is

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held, or associates, in which between 10% and 50% of the voting power is held, or they may be quasi- corporations such as branches which are effectively 100% owned by their respective parents. The relationship between direct investor and its direct investment enterprises may be complex and bear little or no relationship to management structure. Direct investment relationship are identified according to the criteria of the framework for direct investment relationship (FDIR), including both direct and indirect investment relationship. (OECD, 2008) According to the Balance of Payment Manual: Fifth edition (BPM5), foreign direct investment (FDI) refers to an investment made to acquire lasting interest in enterprises operating outside of the economy of the investor. Further, in case of FDI, the investor’s purpose is to gain an effective voice in the management of the enterprise. The foreign entity or group of associated entities that makes the investment is termed the direct investor. The unincorporated or incorporated enterprise a branch or subsidiary, respectively, in which direct investment is made, is referred to as a direct investment enterprise. Some degree of equity ownership is almost always considered to be associated with an effective voice in the management of an enterprise; the (BPM5) suggests a threshold of 10% of equity ownership to qualify an investor as a foreign direct investor. (Al-Rawashdeh, et, al; 2011) Foreign Direct Investment FDI in one economy is “a category of international investment made by a resident entity in one economy with the objective of establishing a lasting interest in an enterprise resident in an economy other that of the investor. Lasting interest implies the existence of a long-term relationship between the direct investor on the management of the direct investment enterprise. Direct investment involves both the initial transaction between the two entities and all sub sequential capital transaction between them and among affiliated enterprises, both incorporated and unincorporated. A direct investment relationship is established when the direct investor has acquired 10 percent or more of the ordinary shares or voting power of an enterprise abroad. (Milio, 2008)

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2-2-3: The importance of Foreign Direct Investment (FDI) Foreign direct investment FDI is an engine which can support the economic growth in any country; the growth of international trade and production abroad is driven by economic and technological forces. It is also driven by the ongoing liberalization of foreign direct investment and trade policies. Thus, globalization offers an opportunity for the world especially the developing countries to achieve better and faster economic growth through trade and Foreign Direct Investment. In the period 1970s, international trade grew more rapidly than FDI, and thus international trade was by far than most other important international economic activities. This situation changed dramatically in the middle of the 1980s, when world FDI started to increase sharply. In this period, the world FDI has increased its importance by transferring technologies and establishing marketing and procuring networks for efficient production and sales internationally through FDI, foreign investor's benefits from utilizing their assets and resources efficiently. (Louzi and Abadi, 2011) While FDI recipients benefit from acquiring technologies and from getting involved in international production and trade networks. While global FDI flows increased by 25% during 1991-2009, developing countries as a group show an FDI increase of 22% at constant prices (world developing report 2010). FDI flows to poor countries increased to almost 5% of GDP. However, FDI provides much needed resources to developing countries such as capital , technology , managerial skills , entrepreneurial an ability , brands , and access to markets . These are essential for developing countries to industrialize, develop, and create jobs attacking the poverty situation in their countries. As a result, most developing countries recognize the potential value of FDI and have liberalized their investment regimes and engaged in investment promotion activities to attract various. Globalization and regional integration arrangement can change the level and pattern of FDI and also it reduces the trade costs. However, FDI, flows to developing countries started to pick up in the mid-1990s largely as a result of progressive liberalization of FDI polices in most of these countries and the adoption of generally more outward-oriented policies. (Louzi and Abadi, 2011)

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2-2-4: Determinants of Foreign Direct Investment (FDI) Foreign Direct Investment (FDI) determinants are the factors that determine or influence FDI inflows into a given geographical location. They give investors the confidence needed to invest in foreign markets. (Ngowi, 2005) Some of the determinants of Foreign Direct Investment (FDI) in the host countries are: (UNCTAD World Investment Report, 1998) -

Policy framework for FDI.

-

Economic, political and social stability.

-

Rules regulating entry and operations (of FDIs).

-

Standard of treatment of foreign affiliates.

-

Policies on functioning and structure of the markets.

-

International agreement on FDI.

-

Privatization policy.

-

Trade policy (tariffs and non-tariff barriers and coherence of FDI and trade policy.

-

Tax policy.

Economic Determinants include: -

Business facilitation.

-

Investment promotion (including image-building and investment-generating activities and investment –facilitating services).

-

Investment incentives.

-

Hassle costs (related to corruption and administrative efficiency).

-

Social amenities (for example quality of life); After-investment services;

Any country which is seeking for attracting and having more Foreign Direct Investments (FDI) has to take into consideration that these factors are available and suitable, this way the country can show well attractiveness and suitability to the Foreign Direct Investment (FDI).

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2-2-5: Barriers to Foreign Direct Investment (FDI) Foreign Direct Investment FDI is subject to different barriers especially in third countries, these include exclusion of foreign investors from certain economic activities, quantitative limitations whether in the form of quotas or economic needs tests, foreign ownership caps, limitations on the type of establishment (subsidiary or branch), joint venture requirements and discriminatory treatment (e.g. as regards taxation and other forms of state intervention). (www.trade.ec.europa.eu, 2016) The typical view of obstacles to attracting and retaining FDI inflows in developing countries focuses on risk factors such as infrastructure, arbitrary taxation and regulatory systems, exchange and capital control policies, and cultural differences, all of which restrict the operations of MultiNational Corporations (MNCs). (Mansur, 2008) Some Factors that Inhibit FDI flow into host countries: (Aveh and Krah, 2013) 

Limited availability of skilled labor



Low levels of labor productivity



High costs of labor



Low GDP per capita



Low GDP growth



Difficult access to market



High volatility of exchange rates



Poor Trade openness



Limited market size of host economy



Poor governance and hostile regulations



Restrictions on foreign ownership of assets



High corruption and low transparency



Lack of or limited protection of intellectual property rights



Poor road and transport network



Lack of reliable water and energy supply



Poor ICT infrastructure

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

Presence of IMF agreements



Cultural factors



Poor credit infrastructure and credit availability



High interest rates

2-2-6: Removing Barriers Facing Foreign Direct Investments (FDI) Investors must be assured that decision regarding investment incentives and procedures are conducted in a fair and transparent matter, equally importantly, there must be a balance between the need to modernize policies, laws, and procedures, and the need to maintain stable legislative environment. Entrepreneurial planning horizons shouldn’t be subjected to frequent policy reveal by appointed officials. Unless there are real sustainable partnership between the public and private sector, policies and procedures may be untimely, irrelevant and cumbersome in the term of their implementation and impact. (Mansure, 2008) Countries need to be proactive about improving their attractiveness to FDI. However, many drivers of foreign investment—such as a country’s location, market size, and availability of natural resources—cannot be influenced by decisions and actions of policymakers. Furthermore, other policy-related drivers of FDI—such as macroeconomic performance, infrastructure quality, and human capital—can only be influenced in the medium- to long-run. In contrast, there are factors related to laws and institutions that countries can address and improve in the short-term. (www.worldfinance.com, 2016) Some basic principles should guide the design of countries’ laws and regulations for attracting foreign investment. (www.worldfinance.com, 2016) 

All investors should be treated fairly, For example, the process for opening a local subsidiary should be governed by the same rules for all companies, regardless of their home country. Any difference in treatment should be due to a company’s size, legal form, or commercial activity—not the nationality of its shareholders.



Countries should have clear, transparent laws and regulations allowing for efficient commercial transactions. A country’s legal regime should provide investors sufficient security to make them feel comfortable operating and expanding their businesses.

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

The authorities should adopt effective regulations that both ensure fair protections for the greater public good, and eliminate unnecessary and burdensome bureaucracy.



Finally, countries can enhance their competitiveness by creating supportive public institutions. The shapes these institutions take will depend on the country and context in which they are created. Yet in all cases supportive institutions are those that provide public officials with incentives to supply the public with useful services at least cost in terms of corruption and rent seeking.

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2-3: Qualified Industrial Zones (QIZ) in Jordan 2-3-1: Introduction 2-3-2: Definition of Qualified Industrial Zones (QIZ) 2-3-3: Rules of export in the Qualified Industrial Zones (QIZ) 2-3-3-1: Jordan – USA Free Trade Agreement (FTA)

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2-3-1: Introduction Qualified Industrial Zone (QIZ) is any area that has been specified as such by the U.S. Government, and which has been designated by local authorities as an enclave where a product manufactured in the zone may enter U.S. markets without payment of duty or excise taxes, and without the requirement of any reciprocal benefits. (www.jic.gov.jo, 2016) The first Jordanian Qualified Industrial Zone (QIZ), which was Irbid Qualifying Industrial Zone, was established in November 1997. There are currently six operating QIZ locations in Jordan: (Ministry of Industry and Trade, 2016) -

Al-Hassan Industrial Zone

-

Al-Dulayal Industrial Zone

-

Al-Rusaifa Industrial Zone.

-

Al-Tajamouat Industrial Zone.

-

Al-Karak Industrial Zone

-

Cyber City Industrial Zone.

The main objective from establishing the QIZ Agreement was to allow Jordan’s products to entre US market with duty free. But there was also many other advantages included in the agreement such as the exemption from income and sales tax, social security taxes, acquiring of full ownership or control of plants within the boundaries of the QIZ, and full restoration of capital, profits and salaries as well as exemption from customs tariffs . The agreement does not include any time limits, quota restrictions, or renewal requirements or termination date. Qualified Industrial Zones QIZ Agreement has brought significant returns to Jordan in several ways, mainly by the increase in Jordan’s exports, especially the Textile exports, also it offered a lot of jobs vacancies, training and enhancing of workers skills and knowledge, technology transfer and growth of foreign investments. These advantages can be seen in the review of Jordan’s international trade record which reflects an increase in the volume of exports to the USA, especially in textiles products from the QIZs. This increase reached a peak in 2006 and reached $1.4 billion in 2015, with exports growing to around a billion US dollars. As the growth in exports presented a form of success attributed to the QIZs, the success of other aspects

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of the agreement was debated, especially those relating to impact on local employment, value added, backward and forward linkages and impact on local communities, and many other advantages. (www.state.gov, 2016)

2-3-2: Definition of the Qualified Industrial Zones (QIZ) A QIZ or a "Qualifying Industrial Zone" is any area that has been specified as such by the U.S. Government, and which has been designated by local authorities as an enclave where a product manufactured in the zone may enter U.S. markets without payment of duty or excise taxes, and without the requirement of any reciprocal benefits. (www.jic.gov.jo, 2016) Qualifying Industrial Zones (QIZ) are industrial parks that house manufacturing operations in Jordan and Egypt. They are special free trade zones established in collaboration with neighboring Israel to take advantage of the free trade agreements between the United States and Israel. Under the trade agreements with Jordan as laid down by the United States, goods produced in QIZ-notified areas can directly access US markets without tariff or quota restrictions, subject to certain conditions. To qualify, goods produced in these zones must contain a small portion of Israeli input. In addition, a minimum 35% value to the goods must be added to the finished product. The zones differ from other trade zones as they are stand-alone entities within one country and not directly connected to other countries. In addition, their products are for exports and domestic consumption in any country, not limited to specific countries, and most importantly operate only under the authority and conditions laid down by the host government. (Bolle, et, al; 2008)

2-3-3: Rules of Export in the Qualified Industrial Zones (QIZ) Qualified Industrial Zones (QIZs) are areas designated by Jordanian authorities and approved by the US government, so that It must identify territory with known borders but not necessarily contiguous. Jordan must designate its respective zone as “an enclave where

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merchandise may enter without payment of duty or excise taxes”. And continuously the ready made goods that are produced by in these QIZs are entitled to enter the United States, duty free and without any quota limit. The agreement requires specific rules of origin but does not require reciprocal treatment by Jordan.

A committee consisting of Jordanian and Israeli government officials determines whether products are eligible for duty free treatment. The manufacturer must provide detailed information about the costs of materials and labour, to prove that the product fulfils QIZ production requirements and rules of origin. A representative of the United States has the right to participate in meetings of the committee as an observer. The importer, the US, must certify that the article meets the conditions for the duty exemption. To qualify a product in the QIZ, contents of any product produced in the QIZs must represent a minimum of 35 per cent of the appraised value. Compliance requires that articles eligible for QIZ status must: (1) be wholly the growth, product, or manufacture of, and must be imported directly from the West Bank or Gaza Strip (administered by the Palestinian Authority), or a QIZ; and (2) meet the following rules-of-origin requirements: at the time the product enters the United States, material and processing costs incurred in a QIZ must total not less than 35 per cent of the appraised value of the product. Of this 35 per cent, 20 per cent must come from Israel and Jordan or Egypt, and 15 per cent may be either materials or from the US or Israel, the West Bank and Gaza Strip, and or Jordan or Egypt. The remaining 65 per cent can come from anywhere in the world. (Ghoneim and Awad, 2009) 2-3-3-1: Exports Rules and Jordan – USA Free Trade Agreement (FTA) In 2000, based on the success of QIZs experience, and Jordan’s relation with the US, the US began to negotiate an FTA with Jordan. By October 24, 2000, Jordan and the United States entered into a free trade agreement (JUSFTA) with the objective of strengthening economic ties through a gradual elimination over ten years of tariffs applied to all goods, except alcohol and tobacco, traded between both countries. The JUSFTA went into effect in December 2001. The gradual elimination entailed that the agreement removes first the lowest tariffs while phasing out the highest tariffs over stages. The JUSFTA covers provisions related to goods and services, protection of intellectual property rights (IPR), the environment, labor, and electronic commerce. Under the FTA, tariffs on the majority of apparel, textile made-up goods and footwear and travel

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goods were phased only during 2010. Hence, the duty free benefits provided by QIZs remained advantageous even after the coming into effect of the JUSFTA. To receive duty-free treatment under the FTA, a product must meet a value-added content requirement (35 % of the appraised value of the article upon entry into the US). (www.Rss.jo, 2013)

The following comprises the main points of comparison between the QIZs arrangement of Jordan and that of the JUSFTA. (Khrais, et, al; 2010) 1- Jordan’s QIZ Agreement was signed in 1998 and the JUSFTA was signed in 2000. The QIZ Agreement denotes areas designated by the Jordanian and Israeli authorities and approved by the U.S. government, where products of these zones can be exported duty free and quota free to the U.S., making use of the Israeli Free Trade Area Agreement with the U.S. No tariffs or duties were imposed. The agreement was signed in 2000. On the other hand, the JUSFTA is a bilateral treaty between Jordan and the United States that does not impose tariffs or duties for commerce conducted across their borders, eliminating tariffs on virtually all trade between the two countries during a transitional period (2001–2010). The tariff reductions came in four stages: tariffs of less than 5 % were phased out within the first two years; those that were between 5 and 10 % had been eliminated during four years, those between 10 and 20 % had been eliminated within five years, and those that contained more than 20 % were eliminated within 10 years. 2- The geographic context of the QIZ Agreement is the borders of the QIZs, whereas for JUSFTA it is the borders of Jordan. 3- Although the JUSFTA has no restrictions on value added, the QIZ Agreement has two methods to calculate value added: 

Method 1: 11.7 % content must be added by the Jordanian manufacturer in the QIZ (1/3 of the 35 %); 8 % content must be added by the Israeli manufacturer (7 % for High-tech products); The remainder of the 35 % can come from the QIZ, Israel, Gaza Strip, West Bank, or the U.S. (with a maximum of 15 % from the U.S.). For this method, only direct cost is applied to the calculation of the content.

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

Method 2: Jordanian and Israeli manufacturers must each contribute at least 20 % of the total cost of production of the QIZ product. For this method, both direct and indirect cost is applied to the calculation of the content.

4- In light of the value added restrictions, abiding by them under the QIZ Agreement guarantees exports. For the JUSFTA, since there are no such restrictions, no special export arrangements are required.

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2-4: Foreign Direct Investment (FDI) in Jordan 2-4-1: Introduction 2-4-2: Jordan’s Experience with Foreign Direct Investment (FDI) 2-4-3: Free Trade Agreements (FTA) 2-4-4: Laws and Regulations

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2-4-1: Introduction Foreign Direct Investment (FDI) plays an important role in economic growth. the growth of international production is

driven by economic and technological forces. It is also

driven by the ongoing liberalization of foreign direct investment and trade policies . In this context, globalization offers an unprecedented opportunity for developing countries to achieve faster economic growth through trade and investment. In the period 1970s, international trade grew more rapidly than FDI, and thus international trade was by far than most other important international economic activities. This situation changed dramatically in the middle of the 1980s, when world FDI started to increase sharply. In this period, the world FDI has increased its importance by transferring technologies and establishing marketing and procuring networks for efficient production and sales internationally through FDI, foreign investor's benefits from utilizing their assets and resources efficiently, while FDI recipients benefits from acquiring technologies and from getting involved in international production and trade networks. While global FDI flows increased by 25% during 1991-2009, developing countries as a group show an FDI increase of 22% at constant prices. (www.socialprogressimperative.org, 2010) Also Foreign Direct Investment (FDI) provides much needed resources to developing countries such as capital, technology, managerial skills, entrepreneurial ability, brands, and access to markets. These are essential for developing countries to industrialize, develop, and create jobs attacking the poverty situation in their countries. As a result, most developing countries recognize the potential value of FDI and have liberalized their investment regimes and engaged in investment promotion activities to attract various. Globalization and regional integration arrangement can change the level and pattern of FDI and also it reduces the trade costs. However, FDI, flows to developing countries started to pick up in the mid-1990s largely as a result of progressive liberalization of FDI polices in most of these countries and the adoption of generally more outward-oriented policies. (Louzi and Abadi, 2011) 2-4-2: Jordan’s Experience with Foreign Direct Investment (FDI) Jordan is a small country in the Middle East with limited natural resources, supplies of water, oil and other economic challenges, including chronic high rates of poverty,

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unemployment, inflation, and large budget deficit. Jordan also depends on external source for the majority of its energy requirements. During the 1991-2003 periods, Jordanian economy was highly dependent on the imported crude oil from its neighbor Iraq. Since early 2003, however, Saudi Arabia has been the primary source of oil. In addition, Jordan is benefiting from the gas natural pipeline from Egypt, to address such energy defects, Jordan developed a new energy strategy in 2007 aiming to develop more indigenous and renewable energy source, including oil shale, nuclear energy, wind and solar power. (Bekhet and Smadi, 2014) Jordan experience with Foreign Direct Investment FDI started in the late 1990s, after the authorities of Jordan has noticed the importance of opening up the economy and also the importance of expanding the private sector through a privatization program aimed at shifting the control of many institutions and departments from government to private sector. FDI inflows grew from an average of 0.2% of GDP in the early 1990s to 5.4% between 1997 and 2000 and to 10% of GDP from 2000 to 2011.Over the last decade, the Jordanian government has engaged in a wide scale privatization program. Jordan's energy sector has witnessed the privatization of two distribution companies – the Electricity Distribution Company (EDCO) and the Irbid District Electricity Company (IDECO), and one generation company, the Central Electricity Generating Company (CEGCO). The Amman East Power Plant was built and is owned and operated by AES Jordan PSC, a consortium of AES Oasis (a subsidiary of U.S.-based AES Corporation) and Japan-based Mitsui and Company. AES Jordan PSC operates the plant on a 25-year build-ownoperate (BOO) basis. The $300 million plant project was financed jointly by the U.S. Overseas Private Investment Corporation (OPIC), Japan Bank of International Cooperation (JBIC), and the Sumitomo Banking Corporation (SMBC), with International Bank for Reconstruction and Development (IBRD) risk guarantees. In December 2012, AES Jordan PSC concluded agreements to expand its current investment in Jordan through building an additional 250MW power plant near its existing facility. The project’s estimated cost is $350 million financed by the shareholders ($80 million), OPIC ($170 million), and the European Bank Reconstruction and Development (EBRD) ($100 million). (U.S Department of State, 2013) Jordan has performed relatively well in attracting Foreign Direct Investment FDI Compared to other countries in the reign, either from the Middle East and North Africa (MENA) region. Considering the direct link of Jordan’s borders to some of Gulf countries we can notice

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that major of Jordan’s investments come from Saudi Arabia, Kuwait, and the United Arab Emirates, the United States also got a big portion as a result of the Free Trade Agreement with Jordan. Financial intermediation, extraction industries such as phosphate and potash, chemicals, post and telecommunication, electricity and real estate attract the most FDI. Moreover, preferential US market access given to Jordanian exports under the Qualifying Industrial Zones led to a significant increase of FDI in the garment industry. Jordan ranked 106th out of 185 countries on the World Bank's 2013 Doing Business Report, down from its 2012 ranking. Also Jordan ranked tenth in the MENA region, behind Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Oman, Tunisia, Kuwait, Morocco and Malta. Since 2010, Jordan has improved on several areas key to doing business: (U.S Department of State, 2013) 

The minimum capital requirement for starting a business has been reduced from $1,410 to $1.41.



Jordan now has in place a single reception service for company registration.



Cross border trade has been facilitated through the implementation of a risk-assessment inspection regime for preapproved traders, reducing to 30% the number of containers subject to physical inspection. Foreign Direct Investment in Jordan increased by 190.40 JOD Million in the third quarter of 2015 and averaged 545.40 JOD Million from 2009 until 2015, reaching an all-time high of 1713.30 JOD Million in the fourth quarter of 2009 and a record low of 189.20 JOD Million in the second quarter of 2015. (Central Bank of Jordan, 2016) During the late 1990s, trade liberalization came at the forefront of policies taking precedence, built on the realization that in order to enhance economic growth, integration into the world economy was a prerequisite. A significant step towards this goal was achieved as Jordan acceded to the World Trade Organization (WTO) in 2000. Such a step entailed an alignment of internal processes, procedures, technical and non-technical barriers related to trade such as customs procedures and tariff rates, in accordance to the WTO’s guidelines to ensure transparency and good governance. As such, the accession marked a turning point in relation to Jordan’s global position, paving the way for a major stepping-stone to be achieved in Jordan’s

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external trade relations. In addition, Jordan embarked on several agreements regionally and internationally to capitalize on its trade position. (www.rss.jo, 2013) Establishment of Jordan investment board, (currently Jordan Investment Commission) under the investment promotion law in the past decade was an important indicator of the Jordan’s economic openness and investment promotion in general and FDI in particular. Other indicators are the Golden List program offered by Customs and Labor Department which aimed at give more facilities to those companies which show better performance and commitments to Jordan laws. Many other steps have put Jordan on track to enhance its ability to attract Foreign Direct Investment FDI. Regionally, Jordan had joined the Greater Arab Free Trade Area (GAFTA) by 1998 which eliminate the tax and duties products and raw materials flow between Arab countries, also Jordan signed the Agadir agreement with Tunisia, Morocco and Egypt in 2004, coming into force in 2006. Internationally, Jordan succeeded to join an association of agreement with the European Union by 1997, coming into power in 2002 and with the EFTA countries in 2002. Furthermore, Jordan entered into a Qualified Industrial Zones Agreement with the USA in 1997 and a FTA with the USA by 2000 coming into force by 2001. In 2005, Jordan entered into an FTA with Singapore, Canada and Turkey in 2010 and 2011 respectively. Current meetings and negotiating with many other countries for the purpose of establishing trade agreements with these countries, Pakistan, Thailand and Malaysia are examples of these countries. (www.jic.gov.jo, 2016) In 2012, the United States and Jordan agreed to Statements of Principles for International Investment and for Information and Communication Technology Services, and a Trade and Investment Partnership Bilateral Action Plan, each of which is designed to increase transparency, openness, and governmental and private sector cooperation. The two parties also began discussions on a Customs Administration and Trade Facilitation Agreement. The government of Jordan underwent an investment policy review by the Organization for Economic Cooperation and Development (OECD) with the intent to adhere in 2013 to the OECD Declaration on International Investment and Multinational Enterprises. (U.S Department of State, 2013)

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2-4-3: Jordan Free Trade Agreements (FTA) Jordan is an active signatory of bilateral investment treaties (BITs) with 53 agreements signed. Compared to other countries, Jordan started relatively recently to negotiate BITs and has a high rate of ratified treaties. Some BITs have been negotiated or signed concomitantly with free trade agreements (United States, Canada and Singapore), unlike recent practice to include investment provisions in FTAs. At the regional level, Jordan also signed investment-related agreements, in particular the 1980 Arab League Unified Agreement for Investment. The analysis of selected BITs, including the Jordanian model BIT, reveals that Jordan treaty practice is rather traditional, compared with recent innovations in international investment law aiming at detailing and clarifying concepts and procedures. In addition to provisions related to expropriation in BITs, Jordan’s legislation (Constitution, Investment Law and Land Acquisition Law) covers the issue, thus offering a guarantee for investors which tend to perceive expropriation as a major risk. It would be worth, however, considering including in the Investment Law all the criteria for a lawful expropriation and in the Land Acquisition Law more precise definitions and processes, while offering a clear balance between the legitimate rights of the State to regulate in the public interest and of the investors to protect their property rights. Both Laws could also be better harmonized to ensure predictable interpretation in case of a dispute. (OECD, 2013) A list of these agreements through its official website, here are some of these agreements in below: (www.Mit.gov.jo, 2016) -

Greater Arab Free Trade Area (GAFTA)

-

Agadir Agreement

-

Jordan - United States Free Trade Agreement

-

Jordan – Turkey Free Trade Agreement

-

Jordan – Canada Free Trade Agreement

-

Jordan – Singapore Free Trade Agreement

56

2-4-4: Governmental Institutions and Commission Here below some of the governmental institutions which were being established by Jordanian government to look after and manage the Foreign Direct Investment (FDI) affairs in Jordan. (www.Mit.gov.jo, 2016) -

Foreign Trade Policy

-

Jordan Investment Commission (JIC)

-

Jordan Industrial Estate Company (JIEC)

-

The Development and Free Zones Commission (DFZC)

-

Free Zones Corporation

2-4-5: Foreign Direct Investment’s (FDI) Laws and Regulations: Jordan’s legal investment regime is governed by a series of laws and regulations which can be considered far advanced and attractive to Foreign Direct Investment FDI: (www.Mit.gov.jo, 2016) -

Organization of customs procedures in the system development zones No 12 of 2016.

-

Investment incentive system No 33 of 2015.

-

Investment window system No 32 of 2015.

-

Organization of investment environment recording system and institution in the development of free zones in 2015.

-

Sales tax system No 120 of 2015.

-

Investment Law No. 68 of 2003, which contains general provisions for treatment and protection of investment and describes procedures to benefit from incentives and obtain licenses.

-

Regulation No. 54 of 2000 which lists some sectors those are restricted to foreign investment.

-

The interim Law No. 67 of 2003 which deals with the organization of the Jordan Investment Board.

57

-

Investment Promotion Law Number 16 (1995) and subsequent amendments, and the Temporary Investment Law Number 68 (2003), the Investment Promotion Committee, which falls under Jordan Investment Board, may offer the following incentives:



Exemption from custom duties, general sales tax and social services taxes for projects and on capital goods for the project if delivered within three year from Investment Promotion Committee's approval.



Exemption from duties and taxes on imported spare parts related to specific projects, provided that their value does not exceed 15 percent of the value of the fixed assets requiring spare parts.



Exemptions from duties and taxes on increases in the value of imported capital goods for the project if the increases result from higher freight charges or changes in the exchange rate.



Two-year exemptions on income and social services taxes for industrial projects.



Lifetime exemptions on property taxes for industrial projects.



Exemptions from duties and taxes for machines and equipment used for the expansion and modernization of a project provided they result in at least a 25 percent increase in production capacity.



Exemptions from duties and taxes for hotel and hospital furniture if the supplies are required for modernization and renewal.



Exemptions from income and social service taxes on salaries and allowances payable to non-Jordanian employees.



Exemptions from duties and taxes on goods imported to and/or exported from free zones, with the exception of goods released to the domestic market.

-

The Development Zones Law No. 2 for the year 2008 (the "law") creates six Development Zones, strategically laid out across the kingdom, aiming to aid local investors by creating a competitive business environment as well as providing them with new investment incentives and tax redemptions. According to Article 3 of the law, "the development zones aim at enhancing economic capacity in the Kingdom, attracting the investments and creating an advanced investment environment for economic activities." This is achieved through the execution of the strategic objectives outlined by

58

the law. Some of these objectives include the establishment of public-public and publicprivate partnerships, creating world-class regulatory and economic development organizations with strong institutional capabilities as well as the creation of the Development

Zones

Commission

(the

"Commission").

The Commission, created by Article 6 of the law, plans to accomplish its specific tasks by creating a dependable regulatory system for both the investors and the government. These tasks include, but are not limited, to the following: 1. "Drawing up the general policy of the Development Zones and submitting it to the Council of Ministers for the approval of the same and the endorsement of the plans and programs necessary to implement it. 2. Regulating the investment environment in the Development Zones and regulating and monitoring the Economic activities therein…" 3. "…Protecting the environment, water resources, natural resources and biological diversity in a manner consistent with the Environment Law in effect and the Regulations and Instructions issued thereupon and in coordination with the concerned parties. 4. Regulating the customs procedures which will be applied by the Ministry of Finance / Customs within the Development Zones under a special Regulation issued for this purpose."

59

2-5: Previous Studies 

The study of Birnleitner, Helmut, (2014), Attractiveness of Countries for Foreign Direct Investments from the Macro-Economic Perspective.

The aim of this study was to study the influence of macro-economic factors on the decision for Foreign Direct Investment FDI. Those factors have been separated into five major dimensions Political/Legal, Economic, Social, Technological and Intercultural Factors. Each of those factors consists of minimum five sub-factors which have been analyzed and taken into consideration. The aim was to find out, which factors influence the decisions for FDIs. Main findings are that managers allocate for a country selection the highest importance to the political stability and legal transparency. This is followed by the economic health of a country. Also the sub-factor “Infrastructure”, which is part of the technological environment, is of essential importance. The Intercultural Dimensions occupy a minor role in influencing the decision process. Derived conclusions from these results are that countries can increase their attractiveness for foreign direct investments by putting focus to the political stability, more transparency and stable economic conditions.



The study of Birnleitner, Helmut, (2013), Impact of Macro- Environmental Factors to Foreign Direct Investment and Globalization Process.

The study focuses on macro-level and measures the importance to the decision process of selecting a target country for FDI. The macro-factors have been divided into five main groups: Political, Economic, Social, Technological and Intercultural factors with each five sub-factors. Hereby the importance (xi) for FDI has been measured by semi-structured interviews of 48 highlevel managers. Those Importance Indicators have been put into correlation with the current macro-economic performance of four selected economies: Central Europe, Eastern Europe, China and USA. Results show that managers allocate especially to the two main groups of Political/Legal and Economical Factors the highest importance for FDIs. Also important are social factors. Technological Environment has reached the fourth place and the Intercultural Differences (Hofstede, G., 2001) is not seen as that important. Also the conclusions are that

60

Macro-Economic factors are of essential importance in globalization processes and influence companies who intent to invest into foreign countries.



The study of Khrawish, H and Siam, W, (2010), Determinants of direct foreign investment: Evidence from Jordan.

The study aimed at examining the determinants of direct foreign investment flows into the Jordanian economy over the period of 1997-2007. In the study, the author investigated the impact of different factors affecting the risk level associated with foreign investment, these risks were 1. Economic risk components. 2. Financial risk components. 3. Political risk components. This study examines the economic and financial risks, and excludes the political risk because no data is available on political factors. The analysis has shown that there are significant and positive relationship between foreign direct investment flows into the economy of Jordan and economic and financial variables. Based on this, the study emphasizes on further FDI promotion policies through focusing on discussed incentives to attract new investments.



The study of Abdul Mottaleb. K and Kalirajan, K, (2010), Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis.

The study aimed at finding out the influential factors that determine the FDI inflow to the low income and lower middle income countries and Asian and African and Latin American countries. The study examined the simple correlation coefficient between FDI inflow and the seemingly influential variables and secondly it compared the characteristics between lower middle income countries and low income countries and Asian and African and Latin American countries. The study found that in general lower middle income countries and Asian countries are highly successful in attracting FDI compared to low income and African and Latin American countries. The findings show that most of the lower middle income countries and Asian countries, besides their large domes market, highly linked with the global market through international trade and offer more business friendly environment to the investors. Finally, in the estimated empirical

61

model it is also found that besides GDP size and its growth rate, linkage with the global market through international trade, relationship with the major donor countries in the form of foreign aid and business friendly environment measured by the days required to start a business are the most important and significant factors in determining FDI inflow to the developing countries. Interestingly, the finding reinvigorates the positive role of foreign aid to developing countries in attracting FDI. The findings are robust across the countries and income groups. Thus, the paper concludes that small developing countries across the globe can attract substantial amount of FDI just by adopting more outward oriented trade policy and by providing more business friendly environment to the foreign investors. 

The Study of Krais, et, al; (2010), Constrains Facing Garment Industrial Sector Operating within the Qualified Industrial Zones in Jordan).

The main objective of the present study was to identify the main problems and constrains facing garment industry operating within garment industrial zones in Jordan, special emphasize was related to recognition of the level of basic infrastructure service affecting garment industry operating within qualifying industrial zones. In addition, to analyses the impact of the Egypt’s signing the qualified industrial zones agreement on the competitiveness of garment sector in Jordan. The study also tries to evaluate the effect of Encouragement Investment Law on garment sector operating within qualified industrial zones. To achieve the above mentioned objectives, the researcher designed a self-administrated questioner which was conducted through different statically method to test the hypotheses of the study such as One Test Sample Method and Standard Deviation. The study reveals that level of basic service infrastructure, customs and clearance procedure, double standards procedure, and Egypt’s signing the agreement of qualifying industrial zones are all problems facing garment industrial sector operating within the qualified industrial zones in Jordan. Finally the study recommends effective tools to solve the problem facing the garment sector manufacturing in qualified industrial zones in Jordan.



The study of Bakir, A and Al-Fawwaz, T, (2009), Determinants of Foreign Direct Investment in Jordan.

62

The paper aimed to identify the determinants of foreign direct investments (FDI) in Jordan the years 1996-2007. Also the paper tried to verify whether the Greater Arab Free Trade Area Agreement (GAFTA) had an effect on FDI or not. The most important factors influencing FDI are economic stability, a favorable investment climate (legislation, corporate governance, political stability, absence of red tape, nonexistence of corruption, etc.), adequate human resources, availability of domestic savings, liberalized markets (financial, capital, trade, etc.), and the creation of potential investment opportunities. This study, using a gravity specification model and pooled least square method for the period 1996-2007, tried to determine the effect of economic size of Arab countries, distance, common borders and Jordanians working abroad, on FDI flows into Jordan. It concluded that economic size in terms of GDP and GDP per capita had a significant affect on FDI. The variables distance, common borders and Jordanians working abroad were insignificant in determining FDI flows. Also, the effect of the economic integration agreement (GAFTA) on FDI was investigated and found to have insignificant role in enhancing FDI flows to Jordan from Arab countries



The study of Azzam, Z and Al-Wadi, M, (2008), Foreign Direct Investors’ Reaction Towards Marketing Environmental Variables Faced in Jordan.

The study aimed at examining, investigating and analyzing the issue related to marketing environmental variables that are faced by Foreign Direct Investment FDI in Jordan which motivate foreign direct investor to penetrate Jordan. The study attempt to analyze the role of Jordan government in attracting more FDI to the country, political conditions, government regulations, economic conditions, finance and social conditions faced by international marketers / foreign direct investors in Jordan as marketing environmental variables. The study evaluated the foreign direct investors reaction related to the facilities, motives, incentives, and obstacles which they faced in Jordan through such marketing environment variables. The study found that the foreign direct investors are satisfied with the government regulations and its attracting them to invest directly in Jordan. It find also that majority of FDI operating in Jordan are not satisfied with the economical conditions prevailing in the Kingdome. The study reveals that Finance and

63

banking variables are considered to be incentives for FDI. Also foreign direct investors are not satisfied with Infrastructure facilities provided by government of Jordan.



The study of Demirhan, E and Masca, M, (2008), Determinants of Foreign Direct Investment To Developing Countries: A Cross-Sectional Analysis.

The aim of the study was to explore, by estimating a cross-sectional econometric model, the determining factors of foreign direct investment (FDI) inflows in developing countries over the period of 2000-2004. The study was based on a sample of cross-sectional data on 38 developing countries. The author used average value of all data for the 2000-2004 periods. In the models, dependent variable is FDI. Independent variables are growth rate of per capita GDP, inflation rate, telephone main lines per 1,000 people measured in logs, labor cost per worker in manufacturing industry measured in logs, degree of openness, risk and corporate top tax rate. According to the econometric results, in the main model, growth rate of per capita, telephone main lines and degree of openness have positive sign and are statistically significant. Inflation rate and tax rate present negative sign and are statistically significant. Labor cost has positive sign and risk has negative sign. However, both are not significant.



The study of Al-Khouri, R and Al-Qudah, K, (2006), Problems Facing Owners and Managers Operating in the Qualifying Industrial Zones in Jordan.

The aim of the study was to reveal the major obstacles that both domestic and foreign companies face while working under the Qualifying Industrial Zones (QIZ) agreement in Jordan, according to the opinions of owners and managers. To uncover these problems, a questionnaire specially structured for this purpose was administered and distributed to all companies registered and working under the QIZ in three zones (Al Hassan Industrial Estate, Al Karak Industrial Park, and Al Tajamouat Industrial City). The total number of questionnaires distributed was 78. The results were based on the 51 returned questionnaires with full information, which constitute around 65% of the number of distributed questionnaires. Results indicated that respondents have

64

problems in dealing with the Israeli side (either with exporters of raw material and with the procedures of the Israeli government). Also, respondents have problems related to the political instability in the region and how it will affect their work. In addition, respondents faced problems with recruiting foreign labors, and securing housing and facilities for them. Finally, they faced the problem of getting credit and financing from the local market. Therefore, peace and stability in the region will minimize the problems that face investors when dealing with the Israeli side. The study recommended that to minimize the problem associated with recruiting and hiring foreign labor, as well as, having problems with accommodating them at low costs, companies should be able to have training programs for local workers in order to increase their efficiency and productivity in the fields where they are needed. In addition, the government should issue certain rules and regulations that protect our environment.

2-5-3: A Brief of the Previous Studies

No

Researcher

Title

Variables

Year

Birnleitner,

Attractiveness of

The influence of Macro-

2014

Helmut

Countries for Foreign

Economic Factors

Direct Investments from

(Political, Legal,

the Macro-Economic

Economic, Social,

Perspective.

Technological and

Name 1

Intercultural) on the decision for Foreign Direct Investment FDI. 2

Birnleitner,

Impact of Macro-

The importance of the

Helmut

Environmental Factors to

macro-level and

Foreign Direct Investment

measures (Political,

and Globalization Process

Economic, Social, Technological and

65

2014

Intercultural factors with each five subfactors) to the decision process of selecting a target country for FDI. 3

Khrawish, H and

Determinants of direct

The impact of different

Siam, W

foreign investment:

factors (Economic risk

Evidence from Jordan

components, Financial

2010

risk components, Political risk components) affecting the risk level associated with foreign investment. 4

Abdul Mottaleb.

Determinants of Foreign

The influential factors

K and Kalirajan,

Direct Investment in

that determine the FDI

K

Developing Countries: A

inflow to the low

Comparative Analysis

income and lower

2010

middle income countries and Asian and African and Latin American countries. 5

Krais, E, and

Constrains Facing

The level of basic

Azzam, Z, and

Garment Industrial Sector

infrastructure service

Assaf, A

Operating within the

affecting garment

Qualified Industrial Zones

industry operating

in Jordan

within qualifying industrial zones. And analyses the impact of the Egypt’s signing the qualified industrial zones agreement on the

66

2010

competitiveness of garment sector in Jordan 6

Bakir, A and Al-

Determinants of Foreign

The Greater Arab Free

Fawwaz, T

Direct Investment in

Trade Area Agreement

Jordan

(GAFTA) had an effect

2009

on FDI or not 7

Azzam, Z and

Foreign Direct Investors’

Political conditions,

Wadi, M

Reaction Towards

government regulations,

Marketing Environment

economic conditions,

Variables Faced in Jordan

finance and social

2008

conditions faced by international marketers / foreign direct investors in Jordan as marketing environmental variables 8

Demirhan, E and

Determinants of Foreign

Dependent variable is

Masca, M

Direct Investment To

FDI. Independent

Developing Countries: A

variables are growth

Cross-Sectional Analysis

rate of per capita GDP,

2008

inflation rate, telephone main lines per 1,000 people measured in logs, labor cost per worker in manufacturing industry measured in logs, degree of openness, risk and corporate top tax rate. 9

Al-Khouri, R

Problems Facing Owners

Political instability,

and Al-Qudah, K

and Managers Operating

recruiting foreign

67

2006

in the Qualifying

labors, and securing

Industrial Zones in Jordan

housing and facilities for them, getting credit and financing from the local market

68

2-5-4: What Distinguish This Study The current study focused on measuring the impact of Macro-Marketing Environmental Factors in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan through studying and analyzing five of these factors which are (Economical and Financial, Legal, Political, Infrastructure, and Administrative Structure and Procedural Aspect). Thus, this study is distinguished from other previous studies by selecting most of the macro variables while others studied only some few parts of these factors. Foreign direct investment (FDI) can bring a lot of advantages to the host countries, especially the developing countries who are suffering from short of local fund; these countries have to create the suitable environment to be able to attract the FDI. This research offers to the decision makers in Jordan an analytic study about foreign direct investor’s reaction toward the current Jordan’s environment in its different dimensions. The decision makers can get benefit from this research through maintaining and marketing the positive environments and promoting / enhancing the others which showed less attractiveness to the foreign Direct Investors. The researcher also believes that this study will bring new addition in the field of attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in particular and to Jordan in general by highlighting the successes and the weakness points of governmental services and infrastructures, which can be reconsidered and enhanced to be better suitable. This study is the first ever which has been conducted in English language in Marketing Department at Zarqa University, all previous studies were in Arabic language, the researcher hopes that this can bring in an additional value or advantage to Marketing Department in particular and to Zarqa University in general.

69

Chapter Three Methodology 3-1

Introduction

3-2

Methodology

3-3

Research Population

3-4

Research Sample

3-5

Validity and Reliability

3-6

Research Determinants

70

3-1: Introduction

This chapter discusses the methodology of the study, population, sample, and selection mechanism of the samples, and how the researcher contacted the sample. The chapter also shows the details of the questionnaire and measurements of the reliability as well as the validity.

3-2: Methodology

This study involves a survey of the foreign direct investors (FDI) in the Qualified Industrial Zone (QIZ) in Jordan, those who are getting benefit from government incentives it offers to attract Foreign Direct Investment (FDI). The researcher used the descriptive statistical analytical method for describing the phenomenon of the population. The main goal of this research is to describe the data and the characteristics about what is being studied through gathering data and analysis; also the description will test the study hypothesis to know more about the phenomenon. The researcher depends on the questionnaires for collecting data, which were used in the analysis process. He also used the literature reviews for theoretical topics.

3-3: Research Population

The population of the study is the factories located in the Qualified Industrial Zones (QIZ) represented by the high-level managers in these factories; this includes Finance Managers, Administrative Managers, Marketing Managers, and Logistics Managers, in addition to the CEOs and Deputy Managers. According to Ministry of Labor 2016, there are 55 factories working in the Qualified Industrial Zones (QIZ), most of them are in Textile industry (Ministry of Industry and Trade). All these factories have been covered by the research, so the population consists of all factories working in the six Qualified Industrial Zones (QIZ) in Jordan with an estimated 330 managers working in these 55 factories. (www.Mol.gov.jo, 2016)

3-4: Research Sample For more accurate data, the researcher covered all factories. After distributed 220 questionnaires, 200 were returned with a percentage about 91%. After reviewing it 13

71

questionnaires out of 200 were refused due to some data and questions kept not filled so 93.5% of total returned questionnaires were valid to be analyzed. The sample size is 187 respondents.

3-5: Validity and Reliability 

Face Validity The questionnaire was checked and verified by many academics from marketing colleges

in different universities. The researcher took into consideration the notes and recommendation about the questionnaires and accordingly he modified them to meet the research requirements Appendix (3). 

Reliability The reliability test is conducted. Coefficient Cronbach’s Alpha is a measure of reliability

or internal consistency. A value of Cronbach’s Alpha of (0.7) or above is consistent with the recommended minimum values stated by (Nunnally, 1978). Below table (3-1) shows the reliability of the variables (Cronbach’s Alpha).

Table (3-1) Reliability of the Variables (Cronbach Alpha) Number 1

Variables Economical and Financial Environment

Questions

Cronbach’s Alpha

Q1-Q15

0.735

2

Legal Environment

Q16-Q24

0.791

3

Political Environment

Q25-Q31

0.783

4

Infrastructure

Q32-Q40

0.764

Q41-Q47

0.831

Q48-Q55

0.828

55

0.925

5

6

Administrative Structure and Procedure Attracting Foreign Direct Investment (FDI) All Items

72

From the table, we can see that all study variables have got more than (0.7), the largest variable’s number belongs to Administrative Structure and Procedure Aspect (0.831), and the lowest variable’s number belongs to Economical and Financial Environment (0.735). For all items the Coefficient Cronbach’s Alpha is (0.925). Therefore the research results can be accepted according to Nunnally (1978).

3-6: Research Determinants:

The limits of the research are:

-

Human Limits: The study sample is the Foreign Direct Investors (FDI) in the Qualified Industrial Zones (QIZ) in Jordan.

-

Location Limits: Qualified Industrial Zones (QIZ) in Jordan.

-

Time Limits: Second Semester 2015/2016.

-

Subject Limits: The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct Investment: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan”

73

Chapter Four Data Analysis and Finding

4-1

Profile of Respondents

4-2

Description of Variables

4-3

Test of Data validity

4-4

Test of Hypothesis

74

4-1: Profile of Respondents The study includes nine characteristics. Table (4-1) shows the percentage of each characteristic. Table (4-1) Percentage of Each Characteristic in the Questionnaire

Items

Gender

Age

Level of Education

Characteristics

Frequencies

Percentages

Male

143

76.5%

Female

44

23.5%

Total

187

100%

Below 30 years

53

28.3%

31-40 years

72

38.5%

41-50 years

43

23%

Over 51 years

19

10.2%

Total

187

100%

Graduated High school

29

15.5%

Diploma

33

17.6%

Bachelor

89

47.6%

High studies

36

19.3%

Total

187

100%

CEO

8

4.3%

Deputy General Manager

20

10.7%

Logistic Manager

55

29.4%

Administrative Manager

72

38.5%

Position

75

Type of industry

Financial Manager

20

10.7%

Marketing Manager

12

6.4%

Total

187

100%

Textile

157

84%

Chemicals

10

5.3%

Food

8

4.3%

Other

12

6.4%

Total

187

100%

Less than 5 years

25

13.4%

5-10 years

54

28.9%

11 years or more

108

57.8%

Total

187

100%

10000-50000 JD

18

9.6%

51000-100000 JD

39

20.9%

101000-200000 JD

22

11.8%

More than 200000 JD

108

57.8%

Total

187

100%

Less than 25%

10

5.3%

25%-50%

29

15.5%

51%-75%

24

12.8%

Period of the investment

Capital in JD

Percentage of foreign capital share

76

124

66.3%

187

100%

Less than 50 workers

4

2.1%

51-100 workers

16

8.6%

101- 300 workers

10

5.3%

More than 301 workers

157

84%

Total

187

100%

More than 75% Total

Number of workers

The percentage of male’s respondents were (76.5%) and female were (23.5%).The age of the sample mostly between 31-40 years (38.5%). Who hold the bachelor degree were (47.6%). Also the administrative managers are the largest participation group in the study, about (38.5%). Regarding the type of industry, the textile industry is the main investment in QIZ with (78.6%). The time periods of the investment in the Qualified Industrial Zones (QIZ) mostly more than 11 years which represent (57.8%) and their capital is more than 200,000JD (57.8%). The foreign capital share of investment is more than 75% constitute (66.3%). And most of the factories have more than 301 workers with (84%). 4-2: Description of Research Variables The importance of respondents’ answers has been classified into 3 levels; the following table shows those levels. Table (4-2) Statistical Criterion for Interpreting Arithmetic Mean of the Study’s Variables Level

Means

High

3.67 - 5

Medium

2.33 – 3.66

Low

1 - Less than 2.32

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Six variables were used in the study, five were independents and one was dependent, following discussion show the “Mean” and “Standard Deviation” for the answers of the respondents. I • Economical and Financial Environmental Variable: The variable measured by fifteen questions, table (4-2) shows the “Mean” and “Standard Division” for the respondent’s answers.

Table (4-3) Means and Standard Deviation for the Economical and Financial Environmental Variable Items

Means

Standard Deviation

Importance

Level

1. Government provides enough tax incentives to the investors in the qualified

3.85

0.950

10

High

3.94

0.951

6

High

3.86

0.884

8

High

4.03

0.761

3

High

3.80

0.885

11

High

3.86

0.863

7

High

2.80

1.121

15

Medium

industrial zones. 2. Government provides an exemption on income and sales tax. 3. Customs duties on the imports of raw materials are reasonable and affordable. 4. Customs duties on the exports of readymade goods are reasonable and affordable. 5. Customs clearance procedures for the imported raw materials are easy and flexible. 6. Customs clearance procedures for the exported readymade goods are easy and flexible. 7. Energy, electricity and water cost are reasonable.

78

8. Mminimum wage imposed by the government is appropriate. 9. The foreign direct investors have the right to own project property. 10. Government doesn’t put restrictions on foreign exchange flow. 11. Government doesn’t put restrictions on the transfer of profits abroad.

3.07

1.166

14

Medium

3.87

0.921

9

High

3.80

0.856

12

High

3.95

0.869

5

High

3.98

0.762

4

High

3.59

1.071

13

Medium

4.04

0.802

2

High

4.10

0.676

1

High

3.76

0.902

12. Government allows the recruitment of foreign labor force to work in the factories located in the qualified industrial zones. 13. Recruitment of foreign labor in qualified industrial zones has easy and accessible procedures. 14. Jordan enjoys free trade agreements with many Foreign and Arab countries which gives a privilege to export products to those countries. 15. Jordan membership in economical and trade agreements with many Foreign and Arab countries makes it attractive to foreign direct investment. Average

High

The question with the highest mean is the fifteenth (Jordan member in economical and trade agreements with many foreign and Arab countries makes it attractive to foreign direct investment). The mean is (4.10). And the lowest mean is for questions number seven (Energy, electricity, and water cost are reasonable) the mean is (2.80). The Economical and Financial Environmental variable comes within high level with a Mean of (3.76).

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II • Legal Environmental Variable:

Legal environmental variable is measured by nine questions. Table (4-4) shows the Mean and the Standard Division for respondent’s answers.

Table (4-4) Means and Standard Deviation for the Legal Environmental variable Items

Means

Standard Deviation

16. Existing laws are good and attractive for foreign investments. 17. Existing laws covers all aspects related to foreign direct investment. 18. Laws and regulations that control the foreign direct investments are stable.

3.79

0.866

3.58

0.944

3.67

0.925

19. There is no conflict between the provisions of the laws and regulations relating

3.52

Importance 1

Level

High

6

Medium

4

High

7

Medium

5

Medium

1.018

to direct foreign direct investment. 20. Foreign direct Investment’s laws and legislation are clear and easy to interpret and

3.58

1.010

3.71

1.034

understand. 21. Labor law doesn’t distinguish between domestic and foreign employees. 22. Government provides competent courts to

3

High

8

solve disputes related to foreign direct

3.52

1.069

3.24

1.130

24. Litigation in the courts is transparent.

3.72

1.005

Average

3.59

1.00

Medium

investments. 23. Litigation in the courts is settled within suitable time period.

80

9

Medium

2

High Medium

The question which has the highest mean is question sixteen (Existing laws are good and attractive for foreign investments) the mean is (3.79). And the lowest mean belongs to question twenty three (Litigation in the courts is settled within suitable time period) the mean is (2.80). The Legal environmental variable comes within medium level with a mean of (3.59). III • Political Environmental Variable:

Political environmental variable is measured by seven questions. Table (4-5) shows the Mean and the Standard Division for respondent’s answers. Table (4-5). Means and Standard Deviation for the Political Environmental Variable Items

Means

Standard Deviation

25. The political system of Jordan is stable

Importance

Level

2

which leads to the stability in foreign direct

4.31

High

0.703

investments. 26. Jordan enjoys moderate political system

3

which helps to stabilize and encourage foreign

4.29

0.624

4.38

0.539

4.27

0.707

3.79

1.065

High

direct investment. 27. Jordan enjoys good political relationships with the rest of the world. 28. Jordan’s moderate political policies prevent any international economic sanctions. 29. Jordanian governments are stable and rarely changed. 30. Jordanian government have a desire to

1

4

7

High

High

High

5

attract and encourage foreign direct

4.10

0.850

31. Government’s system is transparent.

4.01

0.839

Average

4.16

0.761

High

investment to Jordan.

81

6

High High

All Political environmental variable questions are in high level. The question which has the highest mean is the twenty seventh (Jordan enjoys good political relationships with the rest of the world) with mean (4.38), on other hand the lowest is twenty ninth (Jordanian governments are stable and rarely changed) which has a mean of (3.79). The Political environmental variable has high level with s mean of (4.16).

IV • The Infrastructure Variable:

The Infrastructure variable is measured by nine questions. Table (4-6) shows the Mean and Standard Division for respondents’ answers.

Table (4-6) Means and Standard Deviation for the Infrastructure Variable Items

Means

Standard Deviation

32. The geographical location of Jordan is

Importance

Level

1

convenient and close to the international

4.01

High

0.861

markets. 33. Violence in the neighboring countries

8

doesn’t adversely affect the stability and

3.36

1.264

3.32

1.123

3.91

0.788

Medium

attracting of foreign direct investment. 34. Jordan has enough ports which makes the process of import and export easy. 35. Qualified Industrial Zones in Jordan are located in suitable sites. 36. Infrastructure in the qualified industrial

9

4

Medium

High

6

zones (industry buildings, warehouses, roads)

3.47

is convenient to carry industries.

82

0.942

Medium

37. Iinfrastructure necessary to carry logistics

5

operations (roads, sea ports, airports) are

3.75

0.942

High

available in Jordan. 38. There is an advanced banking sector in

2

Jordan that is capable to serve foreign direct

3.97

0.703

High

investments properly. 39. There are advanced consulting services

3

that are able to serve the investments

3.94

0.834

3.41

1.124

3.68

0.935

High

properly. 40. A skilled labor force is available in Jordan. Average

7

Medium High

The question which has the highest mean is the thirty two (The geographical location of Jordan is convenient and closes to the international markets); the mean is (4.01). But the lowest mean is question thirty four (Jordan has enough ports which makes the process of import and export easy) which has a mean of (3.32). The Infrastructure variable comes within a high level with a mean of (3.68). V • Administrative Structure and Procedural Aspect Variable:

The Administrative Structure and Procedural Aspect Variable is measured by seven questions. Table (4-7) shows the Mean and the Standard Division for respondents’ answers. Table (4-7) Means and Standard Deviation for the Administrative Structure and Procedure Aspect Variable. Items

Means

Standard Deviation

41. Government procedures are quick. 42. Government procedures and the completion of the daily work can be

83

3.39

1.059

3.48

1.094

Importance

Level

7

Medium

6

Medium

characterized as ease and clarity. 43. There is an availability of expert persons

4

who can handle foreign direct investment

3.54

0.946

3.86

0.942

Medium

issues. 44. Automated procedures are available in government’s institutions. 45. Governmental service offices (customs,

2

High

1

labor office, and chamber room) are available

4.01

0.692

3.70

0.822

High

in all qualified industrial zones in Jordan. 46. The government operations are decentralized. 47. Government persons who are dealing with

3

5

the foreign direct investments issues are well

3.52

1.104

3.64

0.951

High Medium

trained. Average

Medium

About Administrative Structure and Procedural variable questions, the question which has the highest mean is the forty fifth (Governmental service offices. customs, labor office, and chamber room are available in all qualified industrial zones in Jordan) with a mean value of (4.01), while the lowest is the question no forty first (Government procedures are quick) which has a mean of (3.39). The variable has medium level with a mean value of (3.64).

VI • Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan Variable:

The dependent variable (Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan) is measured by eight questions, following table (4-8) shows the Mean and Standard Division for respondent’s answers.

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Table (4-8) Means and Standard Deviation for the Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan Variable Items

Means

Standard Deviation

48. I have the desire to continue investing in Jordan. 49. I recommended to others to invest in Jordan. 50. I have the desire to expand my investments in Jordan in future. 51. Current facilities encourage foreign direct investment. 52. Compares to other countries in the region I prefer Jordan to invest in. 53. Jordan’s political stability is attracting foreign direct investment. 54. The infrastructure in qualified industrial zones is attractive to foreign direct investment.

4.07

0.719

3.99

0.772

4.02

0.796

3.89

0.876

4.32

0.642

4.20

0.761

3.76

1.031

55. Labor law doesn’t distinguish between

Importance 3

5

4

6

1

2

8

Level

High

High

High

High

High

High

High

7

domestic and foreign employees which

3.89

0.906

High

4.02

0.813

High

attracts foreign direct investment. Average

All questions in the dependent variable (Attracting foreign direct investment to Jordan) are of high level, the question which has the highest mean is the fifty second (Compares to other countries in the region I prefer Jordan to invest in) with a mean value of (4.32), on the other hand, the lowest is the question fifty fifth (Labor law doesn’t distinguish between domestic and foreign employees which attracts foreign direct investment) which has a mean value of (3.89). The dependent variable has high level with a mean value of (4.16).

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Next table (4-9) shows comparison between independent variables by using the Mean and Standard Deviation as a measurer.

Table (4-9) Mean and Standard Deviation for the Independent Variables Variables

Means

Standard Deviation

Economical and Financial Environmental

Importance 3

Level

3.76

0.902

Legal Environmental Variable

3.59

1.00

5

Medium

Political Environmental Variable

4.16

0.761

1

High

Infrastructure Variable

3.86

0.935

2

High

3.64

0.951

3.8

0.909

Variable

Administrative Structure and Procedural Aspect Variable Average

4

High

Medium High

Political environmental variable has the highest mean with (4.16) and this due to most of the respondents answers agreed on the stability and suitability of Jordan political system and environment, this also reflect the importance of the political situation in the country in attracting Foreign Direct Investments. In the other hand, the lowest factor attracted Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan is the legal environmental variable with a mean of (3.59).

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4-3: Test of the Data Validity 

Normal Distribution

One of the conditions in using linear regression test is that the data should show normal distribution as indicted by Skewness and Kurtosis. When the skewness is close to (0) and Kurtosis is close to (0) or (3) this indicates that the data are normal distribution. (Landaus, et, al. 2004), table (4-10) shows the result of normal distribution of the Independent variables.

Table (4-10) Normal Distribution of the Independent Variables Administrative Economical and Financial

Legal

Political

Infrastructure

Structure and Procedural Aspect

Skewness

-.068-

-.605-

-.027-

-.097-

-.063-

Kurtosis

0.023

0.044

-0.080-

0.076

0.072

The table explains that all the Skewness and Kurtosis are closed to (0), this means the data are belong to normal distribution. 

Multicollinearity Test

Multicollinearity test indicates if there is a strong relationship between the independent variables by measuring the influence of each independent variable on others. To measure the Multicollinearity we use the correlation indicator, to find out this and measure the strength and the indication of the relationship and phenomenon the correlation between the variables has to be (0.9) or more (Pallant, 2003). Table (4-11) shows all the coefficient relations are less than (0.9) so there is no existence of the Multicollinearity between the independent variables.

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Table (4-11) Correlations of Independent Variables Economic & Financial Environment Economic & Financial Pearson Environment

1

Political Infrastructure Administrative

.537**

.407**

.413**

.542**

.000

.000

.000

.000

1

.554**

.536**

.646**

.000

.000

.000

1

.440**

.430**

.000

.000

1

.527**

Correlation Sig. (2-tailed)

Legal

Legal

Pearson Correlation Sig. (2-tailed)

Political

Pearson Correlation Sig. (2-tailed)

Infrastructure

Pearson Correlation Sig. (2-tailed)

Administrative

.000

Pearson

1

Correlation Sig. (2-tailed)

**. Correlation is significant at the 0.01 level (2-tailed).

4-4: Hypothesis Testing The linear regression procedure examines the effect of the set of Independent variables on the dependent variable. In this research the hypothesis testing based on three regression linear type, Multiple, Simple and Stepwise Regression. For the main hypothesis the multiple regressions is calculated, for sub- hypothesis simple regression is used, finally Stepwise Regression was used to indicate which independent variable has the most effect on dependent variable.

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

Main Hypothesis

H0: There is no statistically significant role (a≤0.05) for Macro Marketing Environmental Factors (Economical and Financial, Legal, Political, Infrastructure, and the Administrative Structure and Procedural Aspects) in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan.

Table (4-12) shows the Result of Multiple Regression for the Main Hypotheses

Table (4-12) Results of Multiple Regressions for the Main Hypotheses Dependent Variable

R

R2

F

DF

SIG

181 0.712

0.508

37.306

186

Investment to Jordan

T

Financial

Attracting

Direct

Variable

B

Economical and 0.130 1.355

5

Foreign

Independent

0.000

Legal

0.048 0.680

Political

0.270 3.877

Infrastructure

0.201 3.253

Administrative

0.248 4.106

Table (4-12) shows the dependent variable (Attracting Foreign Direct Investment to Jordan) and set of independents variables (Economical and Financial, Legal, Political, Infrastructure and Administrative) are significant , because F significant (0.00) is less than (0.05) therefor we reject the null hypothesis and accept the alternative one which states that There is statistically significant role (a≤0.05) for the Macro-Marketing Environmental Factors (Economic and Finance, Legal, Political, Infrastructure, and the Administrative Structure and Procedural Aspects) in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan. The relationship between the dependent and independent is strong. It is more than (0.5) (Cohen, 1988), R= 0.712. Also the R2 = 0.508, which means that the independent variables contribution effect on the dependent variable is about 50.8%.

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Since the value of the calculated T for two factors (Economical and Financial 1.35 and the Legal 0.68) are less than the T Table 1.96, this means that there is no statically significant role on the dependent factor. While the value of the calculated T for the other independent factors (Political 3.87, Infrastructure 3.25, and the Administrative Structure and the Procedural Aspect 4.106) is higher than the T Table 1.96, which means that there is a statically significant role for them on the dependent factor. 

First Sub –Hypothesis

H01: There is no statistically significant role (a≤0.05) for Economical and Financial factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. Table (4-13) shows the results of simple regression for the first subhypothesis.

Table (4-13) Results of Simple Regression for the First Sub- Hypothesis Dependent Variable

R

R2

Attracting Foreign Direct Investment

Independent Variable

T-table

Calculated T

SIG

7.281

0.00

Economical and 0.472

0.223

Financial

1.96

Environment

Table (4-13) shows that, calculated T – value (7.281) is higher than T- table value (1.96), and this indicates that there is a statically significant role for the independent variable on the dependent variable. The significant value of T is less than (0.05), and accordingly, the researcher rejects the null hypothesis and accepts the alternative one which states that: There is statistically significant role (a≤0.05) for Economical and Financial Factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

Table (4-13) also shows that there is a positive (medium) correlation between the independent and dependent variable which is indicated by R value (R= 0.472) which is less than 0.5 (Cohen, 1988). In addition to this, the Economical and Financial variable has a role in attracting Foreign

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Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan, where (R2 = 0.223), which means that the independent variables contributes in attracting Foreign Direct Investment (FDI) by 22.3%, and the remaining percentage is due to the other factors. 

Second Sub –Hypothesis

H02: There is no statistically significant role (a≤0.05) for Legal factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. Table (4-14) shows the results of simple regression for the second sub- hypothesis.

Table (4-14) Results of Simple Regression for the Second Sub- Hypothesis Dependent Variable

R

R2

0.492

0.242

Independent Variable

T-table

Calculated T

SIG

8.955

0.00

Attracting Foreign Direct

Legal

1.96

Investment

Table (4-14) shows that, calculated T – value (8.955) is higher than T- table value (1.96), and this indicates that there is a statically significant role for the independent variable on the dependent variable. The significant value of T is less than (0.05), and accordingly, the researcher rejects the null hypothesis and accepts the alternative one which states that: There is statistically significant role (a≤0.05) for Legal Factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

Table (4-13) also shows that there is a positive (medium) correlation between the independent and dependent variable which is indicated by R value (R= 0.492) which is less than 0.5 (Cohen, 1988). In addition to this, the Legal variable has a role in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan, where (R2 = 0.242), which means that the independent variables contributes in attracting Foreign Direct Investment (FDI) by 24.2%, and the remaining percentage is due to the other factors.

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

Third Sub –Hypothesis H03: There is no statistically significant role (a≤0.05) for Political factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. Table (4-15) shows the results of simple regression for the third sub- hypothesis.

Table (4-15) Results of Simple Regression for the Third Sub- Hypothesis Dependent Variable

R

R2

0.540

0.292

Independent Variable

T-table

Calculated T

SIG

8.726

0.00

Attracting Foreign Direct

Political

1.96

Investment

Table (4-15) shows that, calculated T – value (8.726) is higher than T- table value (1.96), and this indicates that there is a statically significant role for the independent variable on the dependent variable. The significant value of T is less than (0.05), and accordingly, the researcher rejects the null hypothesis and accepts the alternative one which states that: There is statistically significant role (a≤0.05) for Political Factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

Table (4-15) also shows that there is a positive (strong) correlation between the independent and dependent variable which is indicated by R value (R= 0.540) which is higher than 0.5 (Cohen, 1988). In addition to this, the Political variable has a role in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan, where (R2 = 0.292), which means that the independent variables contributes in attracting Foreign Direct Investment (FDI) by 29.2%, and the remaining percentage is due to the other factors.

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

Fourth Sub –Hypothesis

H04: There is no statistically significant role (a≤0.05) for the Infrastructure factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. Table (4-16) shows the results of simple regression for the fourth sub- hypothesis.

Table (4-16) Results of Simple Regression for the Fourth Sub- Hypothesis Dependent Variable

R

R2

0.549

0.301

Independent Variable

T-table

Calculated T

SIG

8.929

0.00

Attracting Foreign Direct

Infrastructure

1.96

Investment

Table (4-16) shows that, calculated T – value (8.929) is higher than T- table value (1.96), and this indicates that there is a statically significant role for the independent variable on the dependent variable. The significant value of T is less than (0.05), and accordingly, the researcher rejects the null hypothesis and accepts the alternative one which states that: There is statistically significant role (a≤0.05) for the Infrastructure Factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

Table (4-15) also shows that there is a positive (strong) correlation between the independent and dependent variable which is indicated by R value (R= 0.549) which is higher than 0.5 (Cohen, 1988). In addition to this, the Infrastructure variable has a role in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan, where (R2 = 0.301), which means that the independent variables contributes in attracting Foreign Direct Investment (FDI) by 30.1%, and the remaining percentage is due to the other factors. 

Fifth Sub –Hypothesis

H05: There is no statistically significant role (a≤0.05) for the Administrative Structure and Procedural Aspects factor in attracting Foreign Direct Investment (FDI) to

93

Qualified Industrial Zones (QIZ) in Jordan. Table (4-17) shows the results of simple regression for the fifth sub- hypothesis.

Table (4-17) Results of Simple Regression for the Fifth Sub- Hypothesis Dependent Variable

R

R2

Investment

Variable

T-table

Calculated T

SIG

10.369

0.00

Administrative

Attracting Foreign Direct

Independent

0.606

0.368

Structure and Procedural

1.96

Aspects

Table (4-17) shows that, calculated T – value (10.369) is higher than T- table value (1.96), and this indicates that there is a statically significant role for the independent variable on the dependent variable. The significant value of T is less than (0.05), and accordingly, the researcher rejects the null hypothesis and accepts the alternative one which states that: There is statistically significant role (a≤0.05) for the Administrative Structure and Procedural Aspect Factor in Attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.

Table (4-15) also shows that there is a positive (strong) correlation between the independent and dependent variable which is indicated by R value (R= 0.549) which is higher than 0.5 (Cohen, 1988). In addition to this, the Administrative Structure and Procedural Aspect variable has a role in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan, where (R2 = 0.368), which means that the independent variables contributes in attracting Foreign Direct Investment (FDI) by 36.8%, and the remaining percentage is due to the other factors.

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

Stepwise Regression

The stepwise classified the independent variable depends on that who has the most contribution on the dependent variable, as well as exclude the variables haven’t high contribution. Table (418) shoes the results of Stepwise Regression. Table (4-18) Results of Stepwise Regression

Number

1

R

R2

0.606

0.368

0.681

0.463

0.707

0.500

Variables Administrative Structure and Procedural Aspects -

2

Administrative Structure and Procedural Aspects.

-

Infrastructure

- Administrative Structure and 3

Procedural Aspects. - Infrastructure - Political

The stepwise classified the independent variables into 3 groups; the first one includes the Administrative Structure and Procedural Aspects, which has the highest contribution on the dependent variable (36.8%).

The second group contains the Administrative Structure and Procedural Aspects and Infrastructure which has the second highest contribution on the dependent variable (46.3%).

The last group contains the Administrative Structure and Procedural Aspects, Infrastructure, and Political, its contribution in the dependent variable is (50%).

95

The stepwise exclude two variables; the Economical and Financial environment and Legal environment because their contribution is weak compare to other independent variables.

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Chapter Five Conclusions and Recommendations 5-1 Conclusions 5-2 Recommendations

97

5-1: Conclusions

The main findings of this study were: 

There is statistically significant role for the Macro-Marketing Environmental Factors (Economical and Financial, Legal, Political, Infrastructure, and the Administrative Structure and Procedural Aspects) in attracting Foreign Direct Investment (FDI) to the Qualified Industrial Zones (QIZ) in Jordan. This conclusion goes in consistence with many previous studies (Birnleitner, 2014); (Birnleitner, 2014); (Khrawish and Siam, 2010); (Krais, et, al; 2010); (Azzam and Wadi, 2008); and (Al-Khouri and Al-Qudah, 2006) which were conducted to measure the effect of all or some of these variables in attracting the FDI in different countries.



There is statistically significant role for the Administrative Structure and Procedural Aspects factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. It has the highest contribution by 36.8%. This result matches the studies of (Krais, et, al; 2010).



There is a statistically significant role for the Infrastructure factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. The contribution of Infrastructure factor is 30.1% and it was the 2nd highest. This conclusion matches the study of (Birnleitner, 2014) and Krais, et, al; 2010) but it mismatches the study of (Azzam, and Wadi, 2008)



There is a statistically significant role for Political factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan. The political factor contribution is 29.2%.

98



There is statistically significant role for Legal factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan, and its contribution is 24.2%.



There is statistically significant role for Economical and Financial factor in attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan; it is the lowest contribution by 22.3%. This conclusion matches the studies of (Birnleitner, 2014); (Khrawish and Siam, 2010); (Azzam and Wadi, 2008); and (Al-Khouri and Al-Qudah, 2006).



Political environment was the most important factor in attracting the Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan, the study indicates that the Foreign Direct Investors are mainly attracted by the Political environment, it has the highest Mean with (4.16) This conclusion matches the study of (Birnleitner, 2014) which also found that Political stability and environment is the most important factor in attracting Foreign Direct Investment (FDI) to the countries.



The lowest effect of the Macro-Marketing Factors in attracting Foreign Direct Investment (FDI) is the Legal environment, the study found that the investors were less attracted by the current rules and regulations govern the Foreign Direct Investment (FDI) in the country. This result mismatched the result of (Birnleitner, 2014) study which in contrary shows a big role and importance of the legal factor in attracting the FDI to the countries.



Textile (Apparel) industry is considered the largest and most important commodity produced and exported in the Qualified Industrial Zones (QIZ) which hits 84% of the total exported commodities. This conclusion matched the studies and annual reports of many governmental institutions and commission (Jordan Investment Commission JIC) and (Department of Statistics) and (Ministry of Industry and Trade).

99

5-2: Recommendations Based on the above analysis and conclusions the researchers suggest the following recommendations: 

Jordan’s government has to get the benefit from the suitable and satisfying Political environment in Jordan to attract more Foreign Direct Investment (FDI) to the country; this can be done by promoting and marketing this environment through deferent marketing and promotion tools, TVs, Public Relation, and specialized magazines are promotions tools can be effectively used.



Jordan’s government has to work better to enhance the Economical and Financial conditions in the country by providing more incentives and exemptions to the Foreign Direct Investments (FDI). This can be also done by reducing the taxes and duets on the imports and exports in and out of the country, also by easing the procedures of customs, clearance, and many other related aspects.



Jordan’s government has to work to enhance the laws and regulations those regulate the Foreign Direct Investment (FDI) in the country to make it better attractive, and to remove the conflicts between some articles of the laws and regulations, it also needs to shorten the time of litigation in the courts.



The researcher recommends the government should continually work to enhance the Administrative Structure and Procedural Aspects in its institutions and departments by working on the quality of the services provided to the foreign direct investors, it can also automating the procedures and implementing the new and advanced technology, also by continues training of the official employees. The government could try to reduce the amount of bureaucracy and eliminate corruption by making the punishment more severe.



Jordan’s government has to enhance the level of basic infrastructure and services in Qualified Industrial Zones (QIZ) in particular and in the whole country in general to ease

100

and better facilitate the industrial operations of the foreign direct investments companies which can result in attracting more investments. 

It is necessary for the government to encourage the Foreign Direct Investors to penetrate through sectors other than Textile Industry benefiting by the success of the experience in attracting Textile Investments in the Qualified Industrial Zones (QIZ).



Government of Jordan has to offer cheaper sources of energy, electricity, and water to the foreign direct industries, either by searching for alternative cheaper sources or by holding part of the cost.

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5-1: References

01- Abdul Mottaleb, K and Kalirajan, K (2010), Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis, ASARC Working Paper 2010/13.

02- Ahmad, M and Khoder, H, (2010), Foreign Direct Investment and its effect on Economic Environment – a look Into Iraqi Investment Law, PP.146-148.

03- Ahid, M and Augustine, A, (2012), The Impact of Global Financial Crises on Jordan, International Journal of Business and Management, Vol. 7, No. 16, P.80.

04- Asiedu, E (2002), On the determinants of foreign direct investment to developing countries: Is Africa is different? Department of Economic, University of Kansas.

05- Asiedu, E, (2005), Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability, Department of Economic, University of Kansas.

06- Aveh, F and Krah, R, (2013), Catalysts and Barriers to Foreign Direct Investment in Ghana, European Journal of Business and Management, Vol.5, No.20, P.61.

07- Azzimonti, M and Sarte, P, (2007), Barriers to Foreign Direct Investment Under Political Instability, Economic Quarterly, Volume 93, Number 3, P.287-288.

08- Azzam, Z and Wadi, M, (2008), Foreign Direct Investors’ Reaction Towards Marketing Environment Variables Faced in Jordan, Journal of Science and Humanities, A referred Annual Research Journal, Vol.10, No.22, P

09- Bakir, A and Alfawwaz, T (2009), Determinants of Foreign Direct Investment in Jordan, International Management Review, Vol. 5 No. 2 2009, P. 66.

10- Birnleitner, H, (2014), Attractiveness of Countries for Foreign Direct Investment From The Macro-Economic Perspective, University of Latvia, 2014.

11- Blythe, Jim, (2014), Principles and Practices of Marketing, 3rd Edition, Sega Publication Ltd, P.29,30,39,39.

12- Birnleitner, H, (2013), Impact of Macro- Environmental Factors to Foreign Direct Investment and Globalization Process, University of Latvia, Aspazijaz Bulv 5, Riga, LV-1050, Latvia.

13- Birnleinter, H, (2013), Influence of Macro-Environmental Factors to the Process of Integrating a Foreign Business Entity, Industry Science and Policy Makers for Sustainable Future. P 392393.s

102

14- Bolle, M and Prados, A and Sharp, J (2006), Qualifying Industrial Zones in Jordan and Egypt, CRS Report for Congress, Congressional Research Service, The Library of Congress, July, 2006.

15- Bekhet, H and Smadi, R (2014), Determining the Causality Relationship among FDI Determinants: Evidence From Jordan, Int. J. Sustainable Economy, Vol. 6, P.139, 262-264.

16- Cohen , J.W, (1988), Statistical Power Analysis for the behavioral science, (2nd edition) 17- Demirhan, E and Masca, M, (2008), Determinants of Foreign Direct Investment Flow to Developing Countries: A Cross-Sectional Analysis, Prague Economic Paper, 2008.

18- Dabour, N, (2000), The Role of Foreign Direct Investment (FDI) in Development and Growth of on OIC Members, Journal of Economic Cooperation, P.27-28.

19- Dumon,

M,

(2016),

Top

6

Factors

That

Drive

Investment

In

China,

http://www.investopedia.com/articles/economics/09/factors-drive-investment-in-china.asp.

20- Dumon, M, (2015), Top 6 Factors That Drive Investment in China, (Investopedia), HTTP://WWW.INVESTOPEDIA.COM/ARTICLES/ECONOMICS/09/FACTORSDRIVEINVESTMENT-IN-CHINA.ASP> ACCESSED 19 JANUARY 2015

21- Greenhouse, S and Barbard, M (2006), An Ugly Side of Free Trade: Sweatshops in Jordan, New York Times, Published on May, 2006.

22- Gaffney, J, (2005), Jordan’s Qualified Industrial Zones: A Qualified Success? 23- Ghoneim, A and Awad, T, (2009), Impact of Qualifying Industrial Zones on Egypt: A Critical Analysis, paper presented at the Virtual Institute UNCTAD meeting, Geneva, 4-7 May, 2009

24- Hajzler, C, (2010), Expropriation of Foreign Direct Investments: Sectoral Patterns from 1993 to 2006, University of Otago, Economics Discussion Papers, No. 1011, P.2.

25- Hakem, M, (2008), Analyzing the Investment Environment of Financial Foreign Investment in Iraq, Ahl Al-Bait Journal, vol. 1, page 27.

26- Jangi, Y, and Banga, A, (2005), Evaluation of Sudan’s experience in attracting foreign direct investment and its impacts on the economic situation, PP.3-20.

27- Johnson, A, (2004), Bureaucratic Corruption, MNEs and FDI, P.13. 28- Kaddumi, T, (2004), Determinant Factors Attracting Foreign Direct Investment to Jordan -An Analytical Study for the Period (1995-2004), P.8.

29- Al-Khouri, R and Al-Qudah, K, (2006), Problems Facing Owners and Managers Operating in the Qualifying Industrial Zones in Jordan, Jordan Journal of Business Administration, Volume 2, No. 1, 2006.

103

30- Kastrati. S (2013), The Effect of Foreign Direct Investment for Host Country’s Economy, American University of Middle East, Kuwait, Vol. 5, Issue. 1, 2013.

31- Khrawish, H and Siam, W (20100, Determinants of direct foreign investment: Evidence from Jordan, BHE – Business and Economic Horizons, Vol.1, p.67.

32- Khrais, E and Azzam, Z and Assaf, A (2010), Constrains Facing Garment Industrial Sector Operating within the Qualified Industrial Zones in Jordan, Zarqa Journal for Research and Studies Humanities, Vol. 10, No. 2. P.82-83.

33- Landau,S. & Everilt ,B. (2004) Ahand book of Statistical Analysis using SPSS. New York : Chapman & Hall press. 34- Louzi, B and Abadi, A (2011), The Impact of Foreign Direct Investment on Economic Growth in Jordan,

35- Mansur, Y (2008), Overcoming Barriers to Foreign Direct Investment in Jordan, International Research Foundation of Oman, P.1-2.

36- Momani, B (2007), A Middle East Free Trade Area: Economic Interdependence and Peace Considered, The World Economy, PP.1682.

37- Milio, S, (2008), Foreign Direct Investment (FDI) in Italy: What are the causes of the current low levels? Final Report (Draft), Roma, Italy 2008, P.4.

38- Nuta, A and Nuta, F, (2012), The Effectiveness of the Tax Incentives on Foreign Direct Investment, Journal of Public Administration, Finance and Law, Issue 1/2012, P.55-56.

39- Ngowi, H, (2005), The Enabling State and the Role of the Public Service in Wealth Creation: Problems and Strategies for Development in Africa, African Assassination for Public Administration and Management, 26th AAPAM Annul Roundtable Conference, White sands Hotel, Mombasa, Kenya 7th – 11th, P.7-8.13.

40- Nunnally, J.C, (1978), Psychmetrics theory,2nd ed. New York. Mc Graw hill. 41- Obalade, T, (2014), The Foreign Direct Investment (FDI) Environment in Jordan: A Descriptive Overview, Academic Research International, Vol.5(4), P.228-229.

42- Pisani, A, (2008), Do Developing Countries’ Tax Incentives Attract Investment or Create Disaster? Tax Notes International, P.300.

43- Pallant ,J, (2003), SPSS Survival Manual ,Philadelphia , open university press 44- Rehman, et, al; (2012), The Impact of Infrastructure on Foreign Direct Investment: The Case of Pakistan, International Journal of Business and Management, Vol. 6, No. 5, P.269.

104

45- Al-Rawashdeh, S and Nsour, J and Salameh, R (2011), Forecasting Foreign Direct Investment in Jordan for the Years (2011-2030), International Journal of Business and Management, Vol.6, P.139.

46- Siaf, I, (2006), The Socio-Economic Implications of the Qualified Industrial Zones in Jordan, Centre for Strategic Studies, University of Jordan.

47- Shah, M, (2014), The Significance of Infrastructure for FDI Inflow in Developing Countries, Journal of Life Economic, P.1.

48- Seetanah, B and Khadaroo, J, (2009), The Role of Transport Infrastructure in Attracting FDI in Africa, Proceedings of the African Economic Conference 2007, P. 357-358.

49- Taghdisi, S, (2011), Jordan’s Paradox of Growth without Employment: A Microcosm of the Middle East? Centre for Development Policy and Research CDPR, University of London.

50- Walsh, J and Yu, J (2010), Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach, International Monetary Fund, P.5-6.

51- African Economic Conference, (2013), Regional Integration in Africa, Montecasino Entertainment Complex, Johannesburg, South Africa 28 – 30 October 2013

52- Reports of Central Bank of Jordan, (2006). 53- Reports of International Labor Organization ILO, (2012) 54- Reports of International World of Commerce ICC, (1999), The World Business Organization, Committee on Customs and Trade Regulations, 8 October 1999, French Version, P.1.

55- Reports of Jordan Investment Commission, 2016 56- Reports of Jordan Economic and Commerce Bureau (2010), Economic Division of the Embassy of Jordan, Washington, D.C.

57- Reports of Ministry of Industry and Trade of Jordan, (2016). 58- Organization for Economic Co-operation OECD, (2006), Policy Framework for Investment, P.24-26.

59- OECD, 2008, Benchmark Definition of Foreign Direct Investment, Fourth Edition – ISBN 97892-64-04573-6 – OECD, 2008.

60- OECD, 2013, Investment Policy Review: Jordan (2013), OECD 2013 61- Office of the United States Trade Perspective, (2016). 62- Royal Scientific Society of Jordan and the Friedrich-Ebert-Stiftung Amman Office, (2013), The Future of Jordan’s Qualified Industrial Zones (QIZs), P.5.

105

63- Study.com, 2015, Political Environment in International Business: Detentions, Factors & Impact,

http://study.com/academy/lesson/political-environment-in-international-business-

definition-factors-impact.html

64- The Official Site of the Jordanian e-Government. 65- United Nations Conference on Trade and Development Geneva, (2002), Trade and Development Report, New York and Geneva 2002, P.151.

66- UNCTAD, (2003), World Investment Report 2003: FDI Policies for Development, National and International Perspective. New York: United Nations.

67- USAID, 2008, Apparel Exports to the United States, A Comparison of Morocco, Jordan, and Egypt, Oct, 2008.

68- Reports of U.S Department of State, (2013), Investment Climate Statement – Jordan, Bureau of Economic and Business Affairs, February, 2013.

69- Report of world developing, (2010) 70- Finance & Development, a quarterly magazine of IMF, March 1999, Volume 36, Nov10). 71- The Jordan’s Time Newspaper, (2014), Jordan’s ranking improves in corruption index, By Dana Al Emam - Dec 04, 2014 - Last updated at Dec 04, 2014.

72- http://trade.ec.europa.eu/doclib/docs/2006/november/tradoc_131004.pdf 73- http://www.worldfinance.com/home/special-reports-home/removing-barriers-to-fdi 74- http://www.businessdictionary.com/definition/macro-environment.html#ixzz3qSqJT87Y. 75- http://www.enotes.com/research-starters/legal-environment-business8876- http://businesscasestudies.co.uk/syngenta/feeding-and-fuelling-the-world-throughtechnology/social-and-legal-factors.html#ixzz3qYGxXQYA.

77- http://www.investopedia.com/terms/i/investmentclimate.asp 78- http://www.state.gov/

106

Appendix Appendix (1) English Questionnaire

Zarka University Faculty of Graduate Studies Marketing Dept

Questionnaire Greetings... The researcher is conducting a field study on "The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct Investment: An Empirical Study on Qualified Industrial Zones in Jordan", in a complement to the requirements of a master's degree in marketing at Zarka University.

Please fill out the questionnaire, which is between your hands with accuracy, objectivity and transparency, stressing that the information obtained by the researcher will be treated confidentially and will be used for research purposes only, your co-operation is essential for the success of this study and it will be highly appreciated.

With my best regards

Supervisor Dr. Zakaria Ahmad Azzam

Researcher Khalid M Al-Badarneh 079-7123695

107

Part I: Personal and functional characteristics:

1. Gender:  Male

2. Age:  Below 30 Years  41-50 years



Female



31 – 40 years Over 51 years



3. Level of formal education you have completed (Please check only one):  Graduated High School  Diploma Degree  Bachelor Degree  High Studies

4. Administrative Position in the Company:  CEO  Logistics Manager  Finance Manager

 

Deputy General Manager Administrative Manager Marketing Manager

5. Type of industry the company is conducting:  Textile Industry  Food Industry

 

Chemicals Industry Others

6. Period of the investment in Jordan:  Less than 5 years  11 years or more



5 – 10 years

7. Capital (In JOD):  10,000 – 50,000  101,000 - 200,000



51,000 - 100,000 More than 200,000

8. Percentage of foreign shares:  Less than 25%  51% - 75%







9. Number of workers:  Less than 50 workers  101- 300 workers  51 – 100 workers  More than 301 workers

108

25% - 50% More than 75%

1.

Government provides enough tax incentives to the investors in the qualified industrial zones.

2.

Government provides an exemption on income and sales tax.

3.

Customs duties on the imports of raw materials are reasonable and affordable.

4.

Customs duties on the exports of readymade goods are reasonable and affordable.

5. 6. 7. 8. 9. 10. 11. 12.

Customs clearance procedures for the imported raw materials are easy and flexible. Customs clearance procedures for the exported readymade goods are easy and flexible. Energy, electricity and water cost are reasonable. Mminimum wage imposed by the government is appropriate. The foreign direct investors have the right to own project property. Government doesn’t put restrictions on foreign exchange flow. Government doesn’t put restrictions on the transfer of profits abroad. Government allows the recruitment of foreign labor force to work in the factories located in the qualified industrial zones.

109

strongly disagree

disagree

Uncertain/ not applicable

Economical and Financial Environment: The economical and financial incentives and burdens structured by the local governments in order to encourage and attract these foreign direct investments and to assure the stability and lasting of these investments to their own countries.

agree

I

strongly agree

Please complete the following questionnaire with specific regard to the above, by placing a (√) in the appropriate box

16. 17. 18. 19.

20. 21. 22.

23. 24.

Existing laws are good and attractive for foreign investments. Existing laws covers all aspects related to foreign direct investment. Laws and regulations that control the foreign direct investments are stable. There is no conflict between the provisions of the laws and regulations relating to direct foreign investment. Foreign direct Investment’s laws and legislation are clear and easy to interpret and understand. Labor law doesn’t distinguish between domestic and foreign employees. Government provides competent courts to solve disputes related to foreign direct investments. Litigation in the courts is settled within suitable time period. Litigation in the courts is transparent.

110

strongly disagree

Legal environment: the laws and regulations set by the local governments in the aim of encouraging and attracting Foreign Ddirect Iinvestment (FDI) to their countries, and to ensure stability and lasting of these investments. This includes the attractiveness and appropriate of this legislation and its clarity and ease, and the availability of specialized courts and competent judicial justice.

disagree

II

Jordan membership in economical and trade agreements with many Foreign and Arab countries makes it attractive to foreign direct investment.

Uncertain/ not applicable

15.

agree

14.

Recruitment of foreign labor in qualified industrial zones has easy and accessible procedures. Jordan enjoys free trade agreements with many Foreign and Arab countries which gives a privilege to export products to those countries.

Strongly agree

13.

32.

strongly disagree strongly disagree

IV

disagree

31.

disagree

30.

Uncertain/ not applicable

29.

Uncertain/ not applicable

28.

agree

27

agree

26.

Strongly agree

25.

Strongly agree

III

Political environment: the nature of the political system in the host countries and its stability, and the impact of this stability on encouraging and attracting of Foreign Direct Investment (FDI) to the country.

The political system of Jordan is stable which leads to the stability in foreign direct investments. Jordan enjoys moderate political system which helps to stabilize and encourage foreign direct investment. Jordan enjoys good political relationships with the rest of the world. Jordan’s moderate political policies prevents any international economic sanctions. Jordanian governments are stable and rarely changed. Jordanian government has a desire to attract and encourage foreign direct investment to Jordan. Government’s system is transparent.

The Infrastructure: The availability of the appropriate infrastructure which is necessary to attract and encourage Foreign Direct Investment (FDI) to the host countries. This includes the availability of roads, railways, airports and sea ports, transport fleet those necessary for the logistics operations. Also the availability of advanced service sector which include customs offices, chamber rooms, labor offices, banks and consulting centers, and any other institution which is necessary to facilitate the industries sector. Also the suitability of countries’ geographical location to encourage and attract Foreign Direct Investment (FDI) in terms of its proximity to the international markets.

The geographical location of Jordan is convenient and close to the international markets.

111

33.

34. 35. 36.

37.

38.

39. 40.

Violence in the neighboring countries doesn’t adversely affect the stability and attracting of foreign direct investment. Jordan has enough ports which makes the process of import and export easy. Qualified Industrial Zones in Jordan are located in suitable sites. Infrastructure in the qualified industrial zones (industry buildings, warehouses, roads) is convenient to carry industries. Iinfrastructure necessary to carry logistics operations (roads, sea ports, airports) are available in Jordan. There is an advanced banking sector in Jordan that is capable to serve foreign direct investments properly. There are advanced consulting services that are able to serve the investments properly. A skilled labor force is available in Jordan.

41. 42.

43. 44.

Government procedures are quick. Government procedures and the completion of the daily work can be characterized as ease and clarity. There is an availability of expert persons who can handle foreign direct investment issues. Automated procedures are available in government’s institutions.

112

strongly disagree

disagree

agree

Strongly agree

Administrative Structure and procedural aspects: The way government agencies behave and achieve the daily work, and how far it shows an efficiency and professionality in conducting the work.

Uncertain/ not applicable

V

45.

46. 47.

Governmental service offices (customs, labor office, and chamber room) are available in all qualified industrial zones in Jordan. The government operations are decentralized. Government persons who are dealing with the foreign direct investments issues are well trained.

Part III: The dependent variable (to attract foreign investment to Jordan):

48.

I have the desire to continue investing in Jordan.

49.

I recommended to others to invest in Jordan.

50. 51. 52. 53. 54. 55.

I have the desire to expand my investments in Jordan in future. Current facilities encourage foreign direct investment. Compares to other countries in the region I prefer Jordan to invest in. Jordan’s political stability is attracting foreign direct investment. The infrastructure in qualified industrial zones is attractive to foreign direct investment. Labor law doesn’t distinguish between domestic and foreign employees which attracts foreign direct investment.

113

strongly disagree

disagree

Uncertain/ not applicable

agree

Strongly agree

Please complete the following questionnaire with specific regard to the above, by placing a (√) in the appropriate box

‫)‪Appendix (2‬‬

‫جامعة الزرقاء‬ ‫كلية الدراسات العليا‬ ‫قسم التسويق‬

‫استبانة الدراسة‬ ‫تحية طيبة وبعد ‪...‬‬ ‫يقوم الباحث بإجراء دراسة ميدانية حول " دور عوامل البيئة التسويقية الكلية في جذب األستتممار األجنبتي‬ ‫المباشر‪ :‬دراسة تطبيقية على المناطق الصناعية المؤهلة في األردن"‪ ،‬وذلك استكماال لمتطلبات نيك درجةك‬ ‫الماجستير في إدارة التسويق في جامعة الزرقاء‪.‬‬ ‫أرجووو التكوورم بتعبالووة االسووتبانة التووي بووي أيووديكم بكوول دقووة ومودوووأية و و افية م كوودا أ المعلومووات التووي‬ ‫يحصل الباحث أليها ستعامل بسرية تامة‪ ,‬وستستخدم ألغراض البحث العلمي فقط إ تعاونكم يعد الركيزة‬ ‫األساسية إلنجاح هذه الدراسة و ت كرو أليه‪.‬‬

‫وتقبلوا فائق االحترام والتقدير‪.‬‬

‫الباحث‬

‫إشراف األستاذ المشارك‬

‫خالد محمود البدارنة‬

‫الدكتور زكريا أحمد العزام‬

‫هاتف‪0797123695:‬‬ ‫‪114‬‬

‫الجزء األول‪ :‬الخصائص الشخصية والوظيفية ألفراد عينة الدراسة‪:‬‬ ‫أرجو التكرم بودع إ ارة ( √) أمام اإلجابة التي تتناسب مع اختيارك‪:‬‬ ‫‪ .1‬الجنس‪:‬‬ ‫‪‬‬

‫ذكر‬

‫أنثى‬

‫‪‬‬

‫‪ .2‬العمر‪:‬‬ ‫أقل م ‪ 30‬سنة‬

‫‪‬‬

‫‪ 31‬سنة ‪ 40 -‬سنة‬

‫‪‬‬

‫‪ 41‬سنة ‪ 50 -‬سنة‬

‫‪‬‬

‫أكبر م ‪ 51‬سنة‬

‫‪‬‬

‫‪ .3‬المؤهل العلمي‪:‬‬ ‫ثانوية أامة‬

‫‪‬‬

‫دبلوم متوسط‬

‫‪‬‬

‫بكالوريوس‬

‫‪‬‬

‫دراسات أليا‬

‫‪‬‬

‫‪ .4‬المنصب األداري في الشركة‪:‬‬ ‫مدير أام‬

‫‪‬‬

‫ناالب مدير أام‬

‫‪‬‬

‫مدير ح‬ ‫مدير مالي‬

‫‪‬‬ ‫‪‬‬

‫مدير أداري‬ ‫مدير تسويق‬

‫‪‬‬ ‫‪‬‬

‫‪ .5‬نوع الصناعة‪:‬‬ ‫محيكات‬

‫‪‬‬

‫صناأات كيماوية‬

‫‪‬‬

‫أغذية‬

‫‪‬‬

‫أخرى‬

‫‪‬‬

‫‪ .6‬مدة األستممار في األردن‪:‬‬ ‫أقل م ‪ 5‬سنوات‬

‫‪‬‬

‫‪ 11‬سنة أو اكثر‬

‫‪‬‬

‫‪ 10 – 5‬سنوات‬

‫‪115‬‬

‫‪‬‬

‫‪ .7‬رأس المال (بالدينار األردني)‪:‬‬ ‫‪ 10‬االف – ‪ 50‬ألف‬

‫‪‬‬

‫‪ 51‬ألف الى ‪ 100‬ألف‬

‫‪‬‬

‫‪ 200 – 101‬ألف‬

‫‪‬‬

‫أكثر م ‪ 200‬ألف‬

‫‪‬‬

‫‪ .8‬نسبة المساهمة األجنبية في رأس المال‪:‬‬ ‫أقل م ‪%25‬‬

‫‪‬‬

‫‪%50 - %25‬‬

‫‪‬‬

‫‪%75 - %51‬‬

‫‪‬‬

‫أكثر م ‪%75‬‬

‫‪‬‬

‫‪ .9‬عدد العمال‪:‬‬ ‫أقل م ‪ 50‬أامل‬

‫‪‬‬

‫‪ 100 – 51‬أامل‬

‫‪‬‬

‫‪ 300 – 101‬أامل‬

‫‪‬‬

‫أكثر م ‪ 301‬أامل‬

‫‪‬‬

‫‪116‬‬

‫الجزء الماني‪ :‬يعكس هتذا الجتزء مستتوق تقييمتك لت ( دور عوامتل البيئتة التستويقية الخارجيتة فتي جتذب‬ ‫األستممار األجنبي المباشر)‪.‬‬ ‫أرجو التكرم بودع إ ارة (√) أمام اإلجابة التي تتناسب مع اختيارك‪:‬‬

‫الرقم‬

‫الفقرات‬

‫أتفق‬ ‫بشدة‬

‫درجة الموافقة‬ ‫ال‬ ‫أتفق محايد أتفق‬

‫ال أتفق‬ ‫تماما‬

‫البيئة األقتصادية و المالية ‪ :‬الحوافز االقتصادية و المالية التي توفرها الحكوموة مو‬ ‫اجل جذب األستثمارات األجنبية المبا رة و لدوما اسوتقرار هوذه األسوتثمارات فوي‬ ‫المحور المناطق الصناأية الم هلة في األرد ‪.‬‬ ‫األول‬ ‫‪1‬‬

‫توووفر الحكومووة حوووافز دووريبية كافيووة للمسووتثمري فووي‬ ‫المناطق الصناأية‪.‬‬

‫‪2‬‬

‫توفر الحكومة اأ اءات م دريبة الدخل و المبيعات‪.‬‬

‫‪3‬‬

‫الرسووووم الجمركيوووة ألوووى مووودخطت األنتوووا منطقيوووة و‬ ‫مناسبة‪.‬‬

‫‪4‬‬

‫الرسووووم الجمركيوووة ألوووى صوووادرات البدووواالع المصووونعة‬ ‫منطقية و مناسبة‪.‬‬

‫‪5‬‬

‫األجوووراءات الجمركيوووة بوووالتخليو ألوووى الموووواد األوليوووة‬ ‫المستوردة سهلة و ميسرة‪.‬‬

‫‪6‬‬

‫األجراءات الجمركية بالتخليو ألى صوادرات البدواالع‬ ‫المصنعة سهلة و ميسرة‪.‬‬

‫‪7‬‬

‫رسوم الطاقة و الكهرباء و المياه منطقية‪.‬‬

‫‪8‬‬

‫الحد األدنى لطجور الذي ت رده الحكومة مناسب‪.‬‬

‫‪9‬‬ ‫‪10‬‬

‫يحق للمستثمر أالجنبي تملك ألم روع‪.‬‬ ‫ال تدع الحكومة قيود ألى تبادل العمطت األجنبية‪.‬‬

‫‪11‬‬

‫ال تدع الحكومة قيود ألى تحويل أألرباح للخار ‪.‬‬ ‫تسمح الحكومة بأسوتقدام قووى العمول األجنبيوة للعمول فوي‬ ‫المصانع المقامة في المناطق الصناأية الم هلة‪.‬‬ ‫اجووراءات اسووتقدام العمالووة األجنبيووة للعموول فووي المنوواطق‬ ‫الصناأية الم هلة سهلة و ميسرة‪.‬‬ ‫تتمتع األرد بأت اقات تجوارة حورة موع العديود مو الودول‬ ‫أألجنبيوة و العربيوة مموا يعطيهوا ميوزة لتصودير المنتجووات‬ ‫الى هذه الدول‪.‬‬

‫‪12‬‬ ‫‪13‬‬ ‫‪14‬‬

‫‪117‬‬

‫‪15‬‬

‫أدوية األرد بأت اقيات اقتصادية و تجاريوة موع العديود‬ ‫موووو الوووودول أألجنبيووووة و العربيووووة يجعوووول منهووووا جاذبووووة‬ ‫لألسثمارات األجنبية المبا رة‪.‬‬

‫البيئة القانونية‪ :‬القواني و الت ريعات التي تدعها الحكومة م اجل تسهيل و جوذب‬ ‫األستثمارات األجنبية المبا رة و لدما استقرارها في المناطق الصوناأية الم هلوة‬ ‫في األرد و ما ي مله ذلك مو مطالموة هوذه الت وريعات و ودووحها و سوهولتها و‬ ‫المحور ي مل كذلك توفر محاكم و نظام قداالي مختو ب و األستثمار‪.‬‬ ‫الماني‬ ‫‪16‬‬ ‫‪17‬‬ ‫‪28‬‬ ‫‪19‬‬ ‫‪20‬‬ ‫‪21‬‬ ‫‪22‬‬ ‫‪23‬‬ ‫‪24‬‬

‫القوووواني الموجوووودة حاليوووا جيووودة و جذابوووة لطسوووتثمارات‬ ‫األجنبية المبا رة‪.‬‬ ‫القوواني الموجوودة حاليوا تغطوي جميوع الجوانوب المتعلقوة‬ ‫باألستثمار األجنبي المبا ر‪.‬‬ ‫القوووواني و الت وووريعات التوووي تحكوووم األسوووتثمار األجنبوووي‬ ‫المبا ر مستقرة‪.‬‬ ‫ال يوجد تدارب بي بنود القواني و الت ريعات المتعلقة‬ ‫باالستثمار األجنبي المبا ر‪.‬‬ ‫القووواني و الت ووريعات المرتبطووة باألسووتثمار وادووحة و‬ ‫يسهل ت سيرها و فهمها‪.‬‬ ‫قانو العمل ال يميز بي العمالة المحلية و االجنبية‪.‬‬ ‫توووفر الحكومووة محوواكم مختصووة لحوول النزاأووات المتعلقووة‬ ‫باألستثمار األجنبي المبا ر‪.‬‬ ‫التقادي في المحاكم يتم ظم فترة زمنية مناسبة‪.‬‬ ‫التقادي في المحاكم اف‪.‬‬

‫البيئتة السياستية‪ :‬طبيعوة النظوام السياسووي فوي األرد و اسوتقراره و مودى توأثير ذلووك‬ ‫ألى جذب و استقرار األستثمارات األجنبية المبا رة في المناطق الصوناأية الم هلوة‬ ‫المحور في األرد ‪.‬‬ ‫المالث‬ ‫‪25‬‬ ‫‪26‬‬ ‫‪27‬‬ ‫‪28‬‬ ‫‪29‬‬ ‫‪30‬‬ ‫‪31‬‬

‫النظام السياسي في األرد مستقر مموا يو دي بودوره الوى‬ ‫استقرار األستثمارات األجنبية المبا رة‪.‬‬ ‫يتمتوووع األرد بنظوووام سياسوووي معتووودل مموووا يسووواأد ألوووى‬ ‫استقرار و ت جيع األستثمارات األجنبية المبا رة‪.‬‬ ‫يتمتع األرد بعطقات سياسية جيدة مع باقي دول العالم‪.‬‬ ‫سياسووات األرد المعتدلووة جنبتووه أيووة أقوبووات أقتصووادية‬ ‫دولية‪.‬‬ ‫الحكومات األردنية مستقرة و قليط ما تتغير‪.‬‬ ‫لدى الحكومة األردنية رغبوة لجوذب و ت وجيع األسوتثمار‬ ‫األجنبي المبا ر لألرد ‪.‬‬ ‫النظام الحكومي اف‪.‬‬

‫ألبنية التحتية‪ :‬توفر البنيوة التحتيوة المطالموة لجوذب و ت وجيع األسوتثمار األجنبوي مو‬ ‫المحور ناحيووة توووفر المبوواني و الطوورق و المطووارات و الموووانل الطزمووة لعمليووات التصوونيع و‬ ‫الرابع للعمليات اللوجستيه و كذلك توفر الم سسات الخدمية مو جموارك و مكاتوب أمول و‬ ‫‪118‬‬

‫بنوك و غيرها م الم سسات االخرى الطزمة لعمل الصناأات‪ .‬كوذلك مودى مطالموة‬ ‫الموقع الجغرافي لألرد لت جيع و جوذب األسوتثمارات األجنبيوة المبا ورة مو ناحيوة‬ ‫قربها م األسواق الدولية و م المعابر و م انل التصدير‪.‬‬ ‫‪32‬‬ ‫‪33‬‬ ‫‪34‬‬ ‫‪35‬‬ ‫‪36‬‬ ‫‪37‬‬ ‫‪38‬‬ ‫‪39‬‬ ‫‪40‬‬

‫الموقووع الج رافووي لووألرد مناسووب و قريووب م و األسووواق‬ ‫الدوليه‪.‬‬ ‫العنف في الودول المجواورة ال يو ثر سولبا ألوى أسوتقرار و‬ ‫جذب األستثمار األجنبي المبا ر‪.‬‬ ‫يمتلك األرد م انى كافيوه مموا يجعول أمليوة األسوتيراد و‬ ‫التصدير سهلة‪.‬‬ ‫تقووع المنوواطق الصووناأية الم هلووة داخوول األرد فووي أموواك‬ ‫مناسبة‪.‬‬ ‫البنيووة التحتيوووة فووي المنووواطق الصووناأية الم هلوووة (هنووواجر‬ ‫صناأية مستودأات و طرق) مطالمة لقيام الصناأات‪.‬‬ ‫تتووفر فوي األرد بنيوة تحتيوة مطالموة للعمليوات اللوجسوتية‬ ‫(طرق موانل بحرية و مطارات)‪.‬‬ ‫يتوفر في األرد قطاع مصرفي حديث و قادر ألى خدمة‬ ‫األستثمارات األجنبية المبا رة‪.‬‬ ‫يتوووفر فووي األرد خوودمات أست ووارية قووادرة ألووى خدمووة‬ ‫االستثمارات األجنبية المبا رة‪.‬‬ ‫يتوفر في األرد ايدي أاملة ماهرة‪.‬‬

‫البنيتتة األداريتتة و الجوانتتب األجرائيتتة‪ :‬و ت وومل األجهووزة الحكوميووة المنوووط بهووا تووول‬ ‫المحور مهمة ادارة و تسيير و األستثمار‪.‬‬ ‫الخامس‬ ‫‪41‬‬ ‫‪42‬‬ ‫‪43‬‬ ‫‪44‬‬ ‫‪45‬‬ ‫‪46‬‬ ‫‪47‬‬

‫األجراءت الحكومية سريعة‪.‬‬ ‫توصوووووف األجوووووراءت الحكوميوووووة و األنجووووواز اليوووووومي‬ ‫للمعامطت بالسهولة و الودوح‪.‬‬ ‫يتوفر األ وخاو ذوي الخبورة و القوادري ألوى األهتموام‬ ‫بقدايا األستثمار األجنبي المبا ر‪.‬‬ ‫تتووووو وفر فوووووي الم سسوووووات الحكوميوووووة المختل وووووة أتمتوووووة‬ ‫لألجراءات‪.‬‬ ‫يتوفر مكاتب خدمات حكومية (جموارك مكتوب أمول و‬ ‫غرفة صناأة) في جميع المناطق الصناأية الم هلوة فوي‬ ‫األرد ‪.‬‬ ‫العمليات الحكومية غير مركزية‪.‬‬ ‫الموظ ي الحكوميي الذي يتعاملو مق قدايا‬ ‫األستثمار األجنبي المبا ر مدربو ب كل جيد‪.‬‬

‫الجزء المالث‪:‬المتغير التابع (جذب األستممار األجنبي المباشر لألردن)‪:‬‬ ‫أرجو التكرم بودع إ ارة (√) أمام اإلجابة التي تتناسب مع اختيارك‪:‬‬ ‫‪119‬‬

‫الرقم‬ ‫‪48‬‬ ‫‪49‬‬ ‫‪50‬‬ ‫‪51‬‬ ‫‪52‬‬ ‫‪53‬‬ ‫‪54‬‬ ‫‪55‬‬

‫أتفق‬ ‫بشدة‬

‫الفقرات‬ ‫لدي الرغبة باألستمرار باألستثمار في األرد ‪.‬‬ ‫قمت بالتوصية لطخري باألستثمار في األرد ‪.‬‬ ‫لووودي الرغبوووة بالتوسوووع باألسوووتثمار فوووي األرد فوووي‬ ‫المستقبل‪.‬‬ ‫التسوووووهيطت الحاليوووووة ت وووووجع األسوووووتثمار األجنبوووووي‬ ‫المبا ر‪.‬‬ ‫مقارنوووة بالووودول األخووورى فوووي المنطقوووة انوووا افدووول‬ ‫األرد لألستثمار فيها‪.‬‬ ‫األسووووتقرار السياسووووي لووووألرد يجووووذب األسووووتثمار‬ ‫األجنبي المبا ر‪.‬‬ ‫البنية التحتية في المناطق الصوناأية الم هلوة تجوذب‬ ‫األستثمار األجنبي المبا ر‪.‬‬ ‫قانو العمول ال يميوز بوي العمالوة المحليوة و الجنبيوة‬ ‫مما ي دي الى جذب األستثمار األجنبي المبا ر‪.‬‬

‫‪120‬‬

‫درجة الموافقة‬ ‫ال‬ ‫أتفق محايد أتفق‬

‫ال أتفق‬ ‫تماما‬

Appendix (3) Names of the respectable professors who have judged and evaluated the questionnaire. With the coordination with my supervisor I have considered all opinions and notes they made.

Name 1- Dr. Foad Shek Salim 2- Dr. Ahmad Gadeer 3- Dr. Mamdouh Ziadat 4- Dr. Ghaith Al-Abdalla 5- Dr. Waleed Al-Awawdeh 6- Dr. Abdulla Al-Edamat 7- Dr. Mahmoud Al-Kelany 8- Dr. Anas Yahia Hadid 9- Dr. Rudina Othman 10- Dr. Mustafa Sheik 11- Dr. Hamza Khraim 12- Dr. Abdulfatah Al-Azzam 13- Dr. Ayed Muala

University Amman Arab University Applied Scientific Private University Applied Scientific Private University Applied Scientific Private University

Academic Rank Professor Professor Associated Professor Associated Professor

Al Al-Bait University

Associated Professor

Al Al-Bait University

Associated Professor

Yarmok University

Associated Professor

Applied Scientific Private University

Assistant Professor

Zarqa University

Professor

Zarqa University

Associated Professor

Zarqa University

Associated Professor

Zarqa University

Assistant Professor

Zarqa University

Assistant Professor

121

Appendix (4) The SPSS result Gender Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

143

76.5

76.5

76.5

2

44

23.5

23.5

100.0

187

100.0

100.0

Total

Age Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

53

28.3

28.3

28.3

2

72

38.5

38.5

66.8

3

43

23.0

23.0

89.8

4

19

10.2

10.2

100.0

187

100.0

100.0

Total

Education Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

29

15.5

15.5

15.5

2

33

17.6

17.6

33.2

3

89

47.6

47.6

80.7

4

36

19.3

19.3

100.0

187

100.0

100.0

Total

122

Position Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

8

4.3

4.3

4.3

2

20

10.7

10.7

15.0

3

55

29.4

29.4

44.4

4

72

38.5

38.5

82.9

5

20

10.7

10.7

93.6

6

12

6.4

6.4

100.0

187

100.0

100.0

Total

Type Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

147

78.6

78.6

78.6

2

10

5.3

5.3

84.0

3

8

4.3

4.3

88.2

4

22

11.8

11.8

100.0

187

100.0

100.0

Total

Period Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

25

13.4

13.4

13.4

2

54

28.9

28.9

42.2

3

108

57.8

57.8

100.0

Total

187

100.0

100.0

123

Capital Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

18

9.6

9.6

9.6

2

39

20.9

20.9

30.5

3

22

11.8

11.8

42.2

4

108

57.8

57.8

100.0

Total

187

100.0

100.0

Foreign Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

10

5.3

5.3

5.3

2

29

15.5

15.5

20.9

3

24

12.8

12.8

33.7

4

124

66.3

66.3

100.0

Total

187

100.0

100.0

Worker Cumulative Frequency Valid

Percent

Valid Percent

Percent

1

4

2.1

2.1

2.1

2

16

8.6

8.6

10.7

3

10

5.3

5.3

16.0

4

157

84.0

84.0

100.0

Total

187

100.0

100.0

Reliability Q1-Q15 Reliability Statistics Cronbach's Alpha

N of Items .735

15

124

Q16-Q24 Reliability Statistics Cronbach's Alpha

N of Items .791

9

Q25-Q31 Reliability Statistics Cronbach's Alpha

N of Items .783

7

Q32-Q40 Reliability Statistics Cronbach's Alpha

N of Items .764

9

Q41- Q47 Reliability Statistics Cronbach's Alpha

N of Items .831

7

Q48- Q55 Reliability Statistics Cronbach's Alpha

N of Items .828

8

All items Reliability Statistics

125

Cronbach's Alpha

N of Items .925

54

Model Summary

Model

R .712a

1

R Square

Adjusted R

Std. Error of the

Square

Estimate

.508

.494

.39323

a. Predictors: (Constant), Administrative, Political, Economic & Financial Environment, Infrastructure, Legal ANOVAb Model 1

Sum of Squares

df

Mean Square

Regression

28.842

5

5.768

Residual

27.987

181

.155

Total

56.830

186

F

Sig. .000a

37.306

a. Predictors: (Constant), Administrative, Political, Economic & Financial Enviroment, Infrastructure, Legal b. Dependent Variable: Investment

Coefficientsa Standardized Unstandardized Coefficients Model 1

B

Std. Error

(Constant)

.589

.324

Economic & Financial

.130

.096

Legal

.048

Political

Coefficients Beta

Collinearity Statistics t

Sig.

Tolerance

VIF

1.818

.071

.089

1.355

.177

.632

1.583

.070

.053

.680

.497

.447

2.237

.270

.070

.250

3.877

.000

.654

1.530

Infrastructure

.201

.062

.214

3.253

.001

.632

1.583

Administrative

.248

.060

.304

4.106

.000

.497

2.011

Enviroment

a. Dependent Variable: Investment Model Summary

126

Model

R .472a

1

R Square

Adjusted R

Std. Error of the

Square

Estimate

.223

.219

.48864

a. Predictors: (Constant), Economic & Financial Environment

Coefficientsa Standardized Unstandardized Coefficients Model 1

B (Constant) Economic & Financial

Coefficients

Std. Error

Collinearity Statistics

Beta

1.413

.360

.691

.095

t

.472

Sig.

Tolerance

3.929

.000

7.281

.000

VIF

1.000

1.000

Enviroment a. Dependent Variable: Investment

Model Summary

Model

R .492a

1

R Square

Adjusted R

Std. Error of the

Square

Estimate

.242

.241

.46291

a. Predictors: (Constant), Legal

Coefficientsa Standardized Unstandardized Coefficients Model 1

B (Constant) Legal

Coefficients

Std. Error 2.239

.201

.495

.055

Beta

t

.492

a. Dependent Variable: Investment

Model Summary

127

Collinearity Statistics Sig.

11.115

.000

8.955

.000

Tolerance

1.000

VIF

1.000

Model 1

R .540a

Adjusted R

Std. Error of the

Square

Estimate

R Square .292

.288

.46649

a. Predictors: (Constant), Political

Coefficientsa Standardized Unstandardized Coefficients Model 1

B (Constant)

Coefficients

Std. Error

Beta

1.593

.280

.582

.067

Political

Collinearity Statistics t

.540

Sig.

Tolerance

5.689

.000

8.726

.000

1.000

VIF

1.000

a. Dependent Variable: Investment

Model Summary

Model 1

R .549a

Adjusted R

Std. Error of the

Square

Estimate

R Square .301

.297

.46333

a. Predictors: (Constant), Infrastructure

Coefficientsa Standardized Unstandardized Coefficients Model 1

B (Constant) Infrastructure

Coefficients

Std. Error

Beta

2.113

.216

.518

.058

Model Summary

Model 1

R .606a

Adjusted R

Std. Error of the

Square

Estimate

R Square .368

t

.549

a. Dependent Variable: Investment

.364

.44076

a. Predictors: (Constant), Administrative

128

Collinearity Statistics Sig.

9.781

.000

8.929

.000

Tolerance

1.000

VIF

1.000

Coefficientsa Standardized Unstandardized Coefficients Model 1

B (Constant) Administrative

Coefficients

Std. Error

Collinearity Statistics

Beta

2.218

.177

.494

.048

t

.606

Sig.

Tolerance

12.560

.000

10.369

.000

VIF

1.000

1.000

a. Dependent Variable: Investment

Model Summary

Model

R

Adjusted R

Std. Error of the

Square

Estimate

R Square

1

.606a

.368

.364

.44076

2

.681b

.463

.458

.40710

3

.707c

.500

.492

.39407

a. Predictors: (Constant), Administrative b. Predictors: (Constant), Administrative, Political c. Predictors: (Constant), Administrative, Political, Infrastructure Correlations Economic & Financial Enviroment Economic & Financial

Pearson Correlation

Enviroment

Sig. (2-tailed)

Legal

Pearson Correlation Sig. (2-tailed)

Political

Pearson Correlation Sig. (2-tailed)

Infrastructure

Pearson Correlation Sig. (2-tailed)

Administrative

Pearson Correlation Sig. (2-tailed)

Legal 1

**

.537

Political

Administrative

.537**

.407**

.413**

.542**

.000

.000

.000

.000

1

**

**

.646**

.000

.000

.000

1

.440**

.430**

.000

.000

1

.527**

.000 .407**

.554**

.000

.000

**

**

.413

Infrastructure

.536

.554

**

.440

.536

.000

.000

.000

.542**

.646**

.430**

.527**

.000

.000

.000

.000

**. Correlation is significant at the 0.01 level (2-tailed).

129

.000 1

‫"دور عوامل البيئة التسويقية الكلية في جذب األستثمار األجنبي المباشر"‬ ‫(دراسة تطبيقية على المناطق الصناعية المؤهلة في األردن )‬ ‫أعرار د‬ ‫خالردمحموردالبراجنه د‬ ‫أشجاف د‬ ‫الركتوجدزكجيادأحمردعزام د‬ ‫الملخص د‬ ‫عارةدمادتجتبطدةاذبي دالبلراندللألستثماجداألةنبيدالمباشجدبالعريردمندعوام دالبيئ دالةزئي دوالكلي ‪،‬دولكنهاد‬ ‫بالغالبددتجتبطدبشك داوثقدبالعوام دالكلي دودهذادهودمادسيشك دمحوجدهذهدالوجق دالبحثي ‪.‬دتمدفص دهذهد‬ ‫العوام دالىدخمس دأبعاردجئيسي دهي‪:‬دالبني داالقتصاري دوالمالي ‪،‬دالقانوني ‪،‬دالسياسي ‪،‬دالبني دالتحتي ‪،‬دودالبني د‬ ‫األراجي دوالةوانبداإلةجائي ‪.‬دك دهذهدالعوام دقردتمدتحليلهادوأخذهادبعينداالعتباج‪،‬داختاجدالباحثداالستثماجاتد‬ ‫األةنبي دالمباشجة دالتي دتقعدفي دالمناطق دالصناعي دالمؤهل د(‪ )QIZ‬دفي داألجرن دلقياس دالفجضيات‪ .‬دتم دتوزيعد‬ ‫‪ 220‬داستبان دعلىدةميعدالشجكاتدالتيدتقعدفيدالمناطقدالصناعي دالمؤهل دودعررهاد‪ 55‬دشجك ‪،‬دتمداستعارةد‬ ‫‪200‬دمنهادبنسب دحواليد‪،٪91‬دبعرداإلطالعدعليهادتمدجفضد‪13‬استبان دمنهادبسببدنقصدالمعلوماتدفيهادود‬ ‫بالتاليدفأندعررداألستباناتدالصالح دللتحلي دكانتد‪187‬داستبان دودبنسب د‪٪93.5‬دمندإةماليداالستبيانات‪.‬د‬ ‫اظهجتدنتائجدالرجاس دانداكثجدعام دةذبدلالستثماجاتداألةنبي دالمباشجةدهودعام داالستقجاجدالسياسي؛دويليد‬ ‫ذل دالهيك داإلراجي دوالةوانب داإلةجائي دلإلراجات دللنظام دوالخرم دالحكومي ‪ .‬دالعام داالقتصاري دللبلر دأيضاد‬ ‫يلعبدروجدوأهمي دفيدةذبدواستقجاجداالستثماجاتداألةنبي دالمباشجة‪.‬دودوةرتدالرجاس دأيضادأندمستوىدالبني د‬ ‫‪130‬‬

‫التحتي دله دأهمي دكبيجة دكذل ‪ .‬دالنتائج دالمستخلص دمن دهذه دالرجاس دأن دالرول داألجرني ديمكن دأن دتزير دمند‬ ‫ةاذبيتهادلالستثماجاتداألةنبي دالمباشجةدمندخال دالتجكيزدعلىدالحفاظدعلىداالستقجاجدالسياسيدالحالي‪،‬دود‬ ‫كذل دالقيام دبالمزير دمن دالتحسينات دو دالتعزيزات دللشجوط دالقانوني دواالقتصاري ‪ ،‬دو دأيضا دمن دخال دتحسيند‬ ‫مستوىدالبني دالتحتي دفيدالرول دوهودأمجدضجوجيدللعملياتداللوةستي دودالتشغيلي دللصناعات‪،‬دودكذل دعلىد‬ ‫الرول دالعم دعلىدتعزيزدودتحسيندالةوانبداإلةجائي دوالشفافي دفيدالمؤسساتدودالروائجدالحكومي ‪.‬‬

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