Assessing the Moderating Effect of Political Stability on the Relationship between FDI and Economic Prosperity: The Case of Jordan

Abstract

Objectives: The current research focuses on proving that Foreign direct investment (FDI) is a significant source for developing countries like Jordan. Therefore, Current research aims to investigate the impact of FDI on the economic prosperity of Jordan, focusing on how this relationship is affected by the country's political stability. The study incorporates the time series data from 2011 to 2021. The economic prosperity of the country is measured through the real gross domestic product (Real GDP) growth rate. Methods: The econometric analysis indicates that FDI has a positive significant impact on the economic prosperity of Jordan, but the political stability of the country also influences this effect. by using these indicators Unit Root Test, Regression Analysis, and Hierarchical Regression Analysis. Results: The findings indicate that the political instability of the country hurts the relationship between FDI and economic prosperity. Current research has positive significant implications for economic policymakers and politicians of Jordan. Conclusion: Jordanian policymakers and politicians should focus on improving the country's political stability, which will lead to attracting more FDI and economic prosperity.