“Trilogy” of FDI, Export, and Remittances: An Empirical Study on Jordan’s Economic Development

Abstract

One of the most difficult challenges facing the economies of developing and wealthy countries alike is the concern about economic development, particularly the issues of economic growth and unemployment. The study concentrated on the trinity of foreign direct investment, exports, and remittances because it is one of the most significant factors in international commerce and financial transactions and the main source of foreign reserves in Jordan. The study investigated the impact of foreign direct investment flows and foreign remittances in addition to exports on unemployment levels in Jordan in the period from 1982 to 2020, and unemployment was used as a representative variable for the economic development process. The study aimed to demonstrate the effect in the long run, and the auto-regressive distributed lags test (ARDL) was used as a tool for the standard analysis. The results showed that each of the three independent variables reduced unemployment in the long run, and the results showed a co-integration relationship in the long run. This study is considered one of the few and rare studies investigating this trio’s impact on Jordan’s economic development. Based on the results, the study presented recommendations for decision-makers.