the role of macro-marketing environmental factors in...
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I
The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct
Investment: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan”
"المباشر البيئة التسويقية الكلية في جذب األستثمار األجنبي واملدور ع"
(المناطق الصناعية المؤهلة في األردن )دراسة تطبيقية على
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
II
The Role of Macro-Marketing Environmental Factors in Attracting Foreign Direct
Investment: “Empirical Study at Qualified Industrial Zones (QIZ) in Jordan”
"المباشر البيئة التسويقية الكلية في جذب األستثمار األجنبي واملدور ع"
(المناطق الصناعية المؤهلة في األردن )دراسة تطبيقية على
الطالب إعداد
خالد محمود البدارنة
20149039
اشراف
زكريا احمد عزام د.
.استكماالً لمتطلبات الحصول على درجة الماجستير في تخصص التسويق مشروعال اهذتم اجراء
الدراسات العليا كلية
جامعة الزرقاء
األردن -الزرقاء
الثاني الدراسي الفصل
2016أيار /
III
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)
IV
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: ……………………………………………………………………
V
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 Signature
Dr. Zakaria Azzam (Supervisor / Chairman): …………………………………
Dr. Abdel Fattah Al Azzam (Internal Evaluator): ………………………………………
Dr. Hamza Khraim (Internal Evaluator): ………………………………………
Dr. Salim Khanfar (External Evaluator): …………………………………….
VI
Dedication
To The Soul of My Dad
VII
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
VIII
Table of Contents
Subject Page
The Title in English I
The Title in Arabic II
Abstract III
Authorization Letter IV
The Approval of the Examination Committee V
Dedication VI
Thankfulness and Appreciations VII
Table of Contents VIII
List of the Tables X
List of Figures XI
Chapter One: General Framework of the Study 1
1-1: Introduction 2
1-2: Research Problem 3
1-3:Research Importance 4
1-4: Research Objectives 5
1-5: Research Hypothesis 5
1-6: Research Model 7
1-7: Procedural Definitions 8
Chapter Two: Theoretical Framework and Literature Review 10
2-1: Macro-Marketing Environmental Variables 11
2-1-1: Introduction 11
2-1-2: Economical and Financial Environment 13
2-1-2-1: Economical and Financial Environment in Jordan 16
2-1-3: Legal Environment 19
2-1-3-1: Legal Environment in Jordan 21
2-1-4: Political Environment 25
2-1-4-1: Political Environment in Jordan 28
2-1-5: Infrastructure 29
2-1-5-1: Infrastructure in Jordan 30
2-1-6: Administrative Structure and Procedural Aspects 33
2-1-6-1: Administrative Structure and Procedural Aspects in Jordan 35
2-2: Foreign Direct Investment (FDI) 37
2-2-1: Introduction 38
2-2-2: Definition of Foreign Direct Investment (FDI) 38
2-2-3: The importance of Foreign Direct Investment (FDI) 40
2-2-4: Determinants of Foreign Direct Investment (FDI) 41
IX
2-2-5: Barriers to Foreign Direct Investment (FDI) 42
2-2-6: Removing Barriers Facing Foreign Direct Investments (FDI) 43
2-3: Qualified Industrial Zones (QIZ) 45
2-3-1: Introduction 46
2-3-2: Definition of Qualified Industrial Zone (QIZ) 47
2-3-3: Rules of Export in the Qualified Industrial Zones (QIZ) 47
2-3-3-1: Export Rules and Jordan – USA Free Trade Agreement 48
2-4: Foreign Direct Investment (FDI) in Jordan 51
2-4-1: Introduction 52
2-4-2: Jordan’s Experience with Foreign Direct Investment (FDI) 52
2-4-3: Jordan Free Trade Agreements (FTA) 56
2-4-4: Governmental Institutions and Commissions 57
2-4-5: Foreign Direct Investment’s (FDI) Lows and Regulations 57
2-5: Previous Studies 60
2-5-4: What Distinguish this Study 69
Chapter Three: Methodology 70
3-1: Introduction 71
3-2: Methodology 71
3-3: Research Population 71
3-4: Research Sample 71
3-5: Validity and Reliability 72
3-7: Research Determinants 73
Chapter Four: Data Analysis and Finding 73
4-1: Profile of Respondents 74
4-2: Descriptions of Research Variables 76
4-3: Test of Data validity 86
4-4: Hypothesis Testing 87
Chapter Five: Conclusions and Recommendations 96
5-1: Conclusions 97
5-2: Recommendations 99
5-3: References 101
Appendixes
Appendix (1): The Questionnaire (English) 106
Appendix (2): The Questionnaire (Arabic) 113
Appendix (3): Questionnaire Evaluation Committee 120
Appendix (4): The SPSS Result 121
X
Abstract – In Arabic
Abstract – In Arabic 129
List of Tables
Table (2-1) Transportation Data in 2014 31
Table (2-2) Telecommunications Capacity in 2014 32
Table (3-1) Reliability of the Variables (Cronbach Alpha) 72
Table (4-1) Percentage of each characteristic in the questionnaire 75
Table (4-2) Statistical criterion for interpreting arithmetic mean of the study
variables
77
Table (4-3) Means and Standard Deviation for the Economical and Financial
Environmental Variable
78
Table (4-4) Means and Standard Deviation for the Legal Environmental
variable
80
Table (4-5) Means and Standard Deviation for the Political Environmental
Variable
81
Table (4-6) Means and Standard Deviation for the Infrastructure Variable 82
Table (4-7) Means and Standard Deviation for the Administrative Structure
and Procedure Aspect Variable.
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 86
Table (4-10) Normal distribution of the Independent Variables 87
Table (4-11) Correlations of the Independent Variables 88
Table (4-12) Results of Multiple Regression for the Main Hypothesis 89
Table (4-13) Results of Simple Regression for the First Sub- Hypothesis 90
Table (4-14) Results of Simple Regression for the Second Sub- Hypothesis 91
Table (4-15) Results of Simple Regression for the Third Sub- Hypothesis 92
Table (4-16) Results of Simple Regression for the Fourth Sub- Hypothesis 93
Table (4-17) Results of Simple Regression for the Fifth Sub- Hypothesis. 94
Table (4-18) Results of Stepwise Regression 95
List of Figures
Figure (1-1) Research Model. 7
1
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
2
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 well-
functioning 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.
3
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?
4
- 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
5
(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:
6
(H0) There is no statistically significant role (a0.05) 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 (a0.05) 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 (a0.05) for the Legal factor in attracting
Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.
- (H03) There is no statistically significant role (a0.05) for the Political factor in
attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.
- (H04) There is no statistically significant role (a0.05) for the Infrastructure factor in
attracting Foreign Direct Investment (FDI) to Qualified Industrial Zones (QIZ) in Jordan.
- (H05) There is no statistically significant role (a0.05) for the Administrative Structure
and Procedural Aspects factor in attracting Foreign Direct Investment (FDI) to Qualified
Industrial Zones (QIZ) in Jordan.
7
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.
Macro-Marketing Environmental Factors Foreign Direct Investment (FDI)
Figure (1-1): Research Model.
Attracting
Foreign
Direct
Investment
(FDI) to
Qualified
Industrial
Zones (QIZ)
in Jordan
Economical and
Financial Environment
Legal Environment
Political Environment
Infrastructure
Administrative Structure
and Procedural Aspects
Independent
Factors
Dependent
Factor
8
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
9
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)
- 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 decision-
making process, exerts a powerful influence on the objective public agencies pursue.
(Smith, 2007)
- 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)
10
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
11
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
12
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.
13
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
14
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
15
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
16
"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 re-
exported, 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
17
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.
19
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.
20
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 pre-
condition 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
21
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
22
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
25
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 foreign-
owned corporations, in which the government simply takes control of the capital stock. The other
is the indirect forms of expropriation that multinational corporations face.
26
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
27
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
28
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)
29
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,
30
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 non-
congestible, 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, non-
discrimination and international laws. Jordan’s location allows for diversification and expansion
into increasingly affluent markets. Below tables highlight some indications about the
31
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
Source: Ministry of Public Works and Housing; Civil Aviation Authority, 2015
55 directly served destinations and 700 served by alliance airlines.
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.
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
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
32
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.
Massive growth of broadband and wireless networks
Tech-savvy population
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.
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.
33
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 less-
developed 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.
34
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)
35
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
36
achieve the daily work, and how far it shows an efficiency and professionality in conducting the
work of Foreign Direct Investors.
37
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)
38
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
39
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)
40
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)
41
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).
42
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 Multi-
National 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
43
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.
44
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.
45
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)
46
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
47
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
48
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
49
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.
50
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.
51
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
52
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,
53
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-own-
operate (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
54
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
55
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)
56
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
57
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.
58
- 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
59
the law. Some of these objectives include the establishment of public-public and public-
private 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."
60
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 high-
level 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
61
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
62
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.
63
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
64
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
65
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
Name
Title Variables Year
1 Birnleitner,
Helmut
Attractiveness of
Countries for Foreign
Direct Investments from
the Macro-Economic
Perspective.
The influence of Macro-
Economic Factors
(Political, Legal,
Economic, Social,
Technological and
Intercultural) on the
decision for Foreign
Direct Investment FDI.
2014
2 Birnleitner,
Helmut
Impact of Macro-
Environmental Factors to
Foreign Direct Investment
and Globalization Process
The importance of the
macro-level and
measures (Political,
Economic, Social,
Technological and
2014
66
Intercultural factors
with each five sub-
factors) to the decision
process of selecting a
target country for FDI.
3 Khrawish, H and
Siam, W
Determinants of direct
foreign investment:
Evidence from Jordan
The impact of different
factors (Economic risk
components, Financial
risk components,
Political risk
components) affecting
the risk level associated
with foreign investment.
2010
4 Abdul Mottaleb.
K and Kalirajan,
K
Determinants of Foreign
Direct Investment in
Developing Countries: A
Comparative Analysis
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.
2010
5 Krais, E, and
Azzam, Z, and
Assaf, A
Constrains Facing
Garment Industrial Sector
Operating within the
Qualified Industrial Zones
in Jordan
The level of basic
infrastructure service
affecting garment
industry operating
within qualifying
industrial zones. And
analyses the impact of
the Egypt’s signing the
qualified industrial
zones agreement on the
2010
67
competitiveness of
garment sector in Jordan
6 Bakir, A and Al-
Fawwaz, T
Determinants of Foreign
Direct Investment in
Jordan
The Greater Arab Free
Trade Area Agreement
(GAFTA) had an effect
on FDI or not
2009
7 Azzam, Z and
Wadi, M
Foreign Direct Investors’
Reaction Towards
Marketing Environment
Variables Faced in Jordan
Political conditions,
government regulations,
economic conditions,
finance and social
conditions faced by
international marketers /
foreign direct investors
in Jordan as marketing
environmental variables
2008
8 Demirhan, E and
Masca, M
Determinants of Foreign
Direct Investment To
Developing Countries: A
Cross-Sectional Analysis
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.
2008
9 Al-Khouri, R
and Al-Qudah, K
Problems Facing Owners
and Managers Operating
Political instability,
recruiting foreign
2006
68
in the Qualifying
Industrial Zones in Jordan
labors, and securing
housing and facilities
for them, getting credit
and financing from the
local market
69
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.
70
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
71
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
72
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 Variables Questions Cronbach’s Alpha
1 Economical and Financial
Environment Q1-Q15 0.735
2 Legal Environment Q16-Q24 0.791
3 Political Environment Q25-Q31 0.783
4 Infrastructure Q32-Q40 0.764
5 Administrative Structure and
Procedure Q41-Q47 0.831
6 Attracting Foreign Direct
Investment (FDI) Q48-Q55 0.828
All Items 55 0.925
73
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”
74
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
75
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 Characteristics Frequencies Percentages
Gender
Male 143 76.5%
Female 44 23.5%
Total 187 100%
Age
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%
Level of Education
Graduated High school 29 15.5%
Diploma 33 17.6%
Bachelor 89 47.6%
High studies 36 19.3%
Total 187 100%
Position
CEO 8 4.3%
Deputy General Manager 20 10.7%
Logistic Manager 55 29.4%
Administrative Manager 72 38.5%
76
Financial Manager 20 10.7%
Marketing Manager 12 6.4%
Total 187 100%
Type of industry
Textile 157 84%
Chemicals 10 5.3%
Food 8 4.3%
Other 12 6.4%
Total 187 100%
Period of the investment
Less than 5 years 25 13.4%
5-10 years 54 28.9%
11 years or more 108 57.8%
Total 187 100%
Capital in JD
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%
Percentage of foreign
capital share
Less than 25% 10 5.3%
25%-50% 29 15.5%
51%-75% 24 12.8%
77
More than 75% 124 66.3%
Total
187 100%
Number of workers
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%
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
78
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
industrial zones.
3.85 0.950 10 High
2. Government provides an exemption on
income and sales tax. 3.94 0.951 6 High
3. Customs duties on the imports of raw
materials are reasonable and affordable. 3.86 0.884 8 High
4. Customs duties on the exports of
readymade goods are reasonable and
affordable.
4.03 0.761 3 High
5. Customs clearance procedures for the
imported raw materials are easy and flexible. 3.80 0.885 11 High
6. Customs clearance procedures for the
exported readymade goods are easy and
flexible.
3.86 0.863 7 High
7. Energy, electricity and water cost are
reasonable. 2.80 1.121 15 Medium
79
8. Mminimum wage imposed by the
government is appropriate. 3.07 1.166 14 Medium
9. The foreign direct investors have the right
to own project property. 3.87 0.921 9 High
10. Government doesn’t put restrictions on
foreign exchange flow. 3.80 0.856 12 High
11. Government doesn’t put restrictions on
the transfer of profits abroad. 3.95 0.869 5 High
12. Government allows the recruitment of
foreign labor force to work in the factories
located in the qualified industrial zones.
3.98 0.762 4 High
13. Recruitment of foreign labor in qualified
industrial zones has easy and accessible
procedures.
3.59 1.071 13 Medium
14. Jordan enjoys free trade agreements with
many Foreign and Arab countries which gives
a privilege to export products to those
countries.
4.04 0.802 2 High
15. Jordan membership in economical and
trade agreements with many Foreign and Arab
countries makes it attractive to foreign direct
investment.
4.10 0.676 1 High
Average 3.76 0.902 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).
80
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 Importance
Level
16. Existing laws are good and attractive for
foreign investments. 3.79 0.866
1 High
17. Existing laws covers all aspects related to
foreign direct investment. 3.58 0.944
6 Medium
18. Laws and regulations that control the
foreign direct investments are stable. 3.67 0.925
4 High
19. There is no conflict between the
provisions of the laws and regulations relating
to direct foreign direct investment.
3.52 1.018
7 Medium
20. Foreign direct Investment’s laws and
legislation are clear and easy to interpret and
understand.
3.58 1.010
5 Medium
21. Labor law doesn’t distinguish between
domestic and foreign employees. 3.71 1.034
3 High
22. Government provides competent courts to
solve disputes related to foreign direct
investments.
3.52 1.069
8
Medium
23. Litigation in the courts is settled within
suitable time period. 3.24 1.130
9 Medium
24. Litigation in the courts is transparent. 3.72 1.005 2 High
Average 3.59 1.00 Medium
81
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 Importance
Level
25. The political system of Jordan is stable
which leads to the stability in foreign direct
investments.
4.31 0.703
2
High
26. Jordan enjoys moderate political system
which helps to stabilize and encourage foreign
direct investment.
4.29 0.624
3
High
27. Jordan enjoys good political relationships
with the rest of the world. 4.38 0.539
1 High
28. Jordan’s moderate political policies
prevent any international economic sanctions. 4.27 0.707
4 High
29. Jordanian governments are stable and
rarely changed. 3.79 1.065
7 High
30. Jordanian government have a desire to
attract and encourage foreign direct
investment to Jordan.
4.10 0.850
5
High
31. Government’s system is transparent. 4.01 0.839 6 High
Average 4.16 0.761 High
82
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 Importance
Level
32. The geographical location of Jordan is
convenient and close to the international
markets.
4.01 0.861
1
High
33. Violence in the neighboring countries
doesn’t adversely affect the stability and
attracting of foreign direct investment.
3.36 1.264
8
Medium
34. Jordan has enough ports which makes the
process of import and export easy. 3.32 1.123
9 Medium
35. Qualified Industrial Zones in Jordan are
located in suitable sites. 3.91 0.788
4 High
36. Infrastructure in the qualified industrial
zones (industry buildings, warehouses, roads)
is convenient to carry industries.
3.47 0.942
6
Medium
83
37. Iinfrastructure necessary to carry logistics
operations (roads, sea ports, airports) are
available in Jordan.
3.75 0.942
5
High
38. There is an advanced banking sector in
Jordan that is capable to serve foreign direct
investments properly.
3.97 0.703
2
High
39. There are advanced consulting services
that are able to serve the investments
properly.
3.94 0.834
3
High
40. A skilled labor force is available in
Jordan. 3.41 1.124
7 Medium
Average 3.68 0.935 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 Importance
Level
41. Government procedures are quick. 3.39 1.059 7 Medium
42. Government procedures and the
completion of the daily work can be 3.48 1.094
6 Medium
84
characterized as ease and clarity.
43. There is an availability of expert persons
who can handle foreign direct investment
issues.
3.54 0.946
4 Medium
44. Automated procedures are available in
government’s institutions. 3.86 0.942
2 High
45. Governmental service offices (customs,
labor office, and chamber room) are available
in all qualified industrial zones in Jordan.
4.01 0.692
1
High
46. The government operations are
decentralized. 3.70 0.822
3 High
47. Government persons who are dealing with
the foreign direct investments issues are well
trained.
3.52 1.104
5 Medium
Average 3.64 0.951 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.
85
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 Importance
Level
48. I have the desire to continue investing in
Jordan. 4.07 0.719
3 High
49. I recommended to others to invest in
Jordan. 3.99 0.772
5 High
50. I have the desire to expand my
investments in Jordan in future. 4.02 0.796
4 High
51. Current facilities encourage foreign direct
investment. 3.89 0.876
6 High
52. Compares to other countries in the region I
prefer Jordan to invest in. 4.32 0.642
1 High
53. Jordan’s political stability is attracting
foreign direct investment. 4.20 0.761
2 High
54. The infrastructure in qualified industrial
zones is attractive to foreign direct investment. 3.76 1.031
8 High
55. Labor law doesn’t distinguish between
domestic and foreign employees which
attracts foreign direct investment.
3.89 0.906
7
High
Average 4.02 0.813
High
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).
86
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 Importance
Level
Economical and Financial Environmental
Variable 3.76 0.902
3 High
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
Administrative Structure and Procedural
Aspect Variable 3.64 0.951
4 Medium
Average 3.8 0.909 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).
87
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
Economical and
Financial Legal Political Infrastructure
Administrative
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.
88
Table (4-11) Correlations of Independent Variables
Economic &
Financial
Environment Legal Political Infrastructure Administrative
Economic & Financial
Environment
Pearson
Correlation
1 .537** .407** .413** .542**
Sig. (2-tailed) .000 .000 .000 .000
Legal Pearson
Correlation
1 .554** .536** .646**
Sig. (2-tailed) .000 .000 .000
Political Pearson
Correlation
1 .440** .430**
Sig. (2-tailed) .000 .000
Infrastructure Pearson
Correlation
1 .527**
Sig. (2-tailed) .000
Administrative Pearson
Correlation
1
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.
89
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
Independent
Variable B T
Attracting
Foreign
Direct
Investment
to Jordan
0.712 0.508 37.306
5
0.000
Economical and
Financial
0.130 1.355
181 Legal 0.048 0.680
186 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%.
90
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 sub-
hypothesis.
Table (4-13) Results of Simple Regression for the First Sub- Hypothesis
SIG T Calculated T-table Independent
Variable
2R R Dependent
Variable
0.00 7.281 1.96
Economical and
Financial
Environment
0.223 0.472
Attracting
Foreign Direct
Investment
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
91
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
SIG TCalculated T-table Independent
Variable
2R R Dependent
Variable
0.00 8.955 1.96 Legal 0.242 0.492
Attracting
Foreign Direct
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.
92
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
SIG TCalculated T-table Independent
Variable
2R R Dependent
Variable
0.00 8.726 1.96 Political 0.292 0.540
Attracting
Foreign Direct
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.
93
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
SIG TCalculated T-table Independent
Variable
2R R Dependent
Variable
0.00 8.929 1.96 Infrastructure 0.301 0.549
Attracting
Foreign Direct
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
94
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
SIG TCalculated T-table Independent
Variable
2R R Dependent
Variable
0.00 10.369 1.96
Administrative
Structure and
Procedural
Aspects
0.368 0.606
Attracting
Foreign Direct
Investment
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.
95
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 (4-
18) shoes the results of Stepwise Regression.
Table (4-18) Results of Stepwise Regression
Number Variables R R2
1 Administrative Structure and
Procedural Aspects 0.606 0.368
2
- Administrative Structure and
Procedural Aspects.
- Infrastructure
0.681 0.463
3
- Administrative Structure and
Procedural Aspects.
- Infrastructure
- Political
0.707 0.500
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%).
96
The stepwise exclude two variables; the Economical and Financial environment and Legal
environment because their contribution is weak compare to other independent variables.
97
Chapter Five
Conclusions and Recommendations
5-1 Conclusions
5-2 Recommendations
98
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%.
99
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).
100
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
101
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.
102
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107
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 Researcher
Dr. Zakaria Ahmad Azzam Khalid M Al-Badarneh
079-7123695
108
Part I: Personal and functional characteristics:
1. Gender:
Male Female
2. Age:
Below 30 Years
41-50 years
31 – 40 years
Over 51 years
3. Level of formal education you have completed (Please check only one):
Graduated High School
Bachelor Degree
Diploma Degree
High Studies
4. Administrative Position in the Company:
CEO
Logistics Manager
Deputy General Manager
Administrative Manager
Finance 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%
25% - 50%
More than 75%
9. Number of workers:
Less than 50 workers
101- 300 workers
51 – 100 workers
More than 301 workers
109
Please complete the following questionnaire with specific regard to the above, by placing a (√) in the appropriate box
I
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.
stro
ngly
agre
e
agre
e
Unce
rtai
n/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
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. 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.
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.
12. Government allows the recruitment of foreign
labor force to work in the factories located in the
qualified industrial zones.
110
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.
II
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.
Str
ongly
agre
e
agre
e
Unce
rtai
n/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
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.
19. There is no conflict between the provisions of the
laws and regulations relating to direct foreign
investment.
20. Foreign direct Investment’s laws and legislation
are clear and easy to interpret and understand.
21. Labor law doesn’t distinguish between domestic
and foreign employees.
22. Government provides competent courts to solve
disputes related to foreign direct investments.
23. Litigation in the courts is settled within suitable
time period.
24. Litigation in the courts is transparent.
111
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.
Str
ongly
agre
e
agre
e
Unce
rtai
n/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
25. The political system of Jordan is stable which
leads to the stability in foreign direct investments.
26. Jordan enjoys moderate political system which
helps to stabilize and encourage foreign direct
investment.
27 Jordan enjoys good political relationships with
the rest of the world.
28. Jordan’s moderate political policies prevents any
international economic sanctions.
29. Jordanian governments are stable and rarely
changed.
30. Jordanian government has a desire to attract and
encourage foreign direct investment to Jordan.
31. Government’s system is transparent.
IV
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.
Str
ongly
agre
e
agre
e
Un
cert
ain/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
32. The geographical location of Jordan is convenient
and close to the international markets.
112
33. Violence in the neighboring countries doesn’t
adversely affect the stability and 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 zones
(industry buildings, warehouses, roads) is
convenient to carry industries.
37. Iinfrastructure necessary to carry logistics
operations (roads, sea ports, airports) are
available in Jordan.
38. There is an advanced banking sector in Jordan
that is capable to serve foreign direct investments
properly.
39. There are advanced consulting services that are
able to serve the investments properly.
40. A skilled labor force is available in Jordan.
V
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.
Str
ongly
agre
e
agre
e
Unce
rtai
n/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
41. Government procedures are quick.
42. Government procedures and the completion of
the daily work can be characterized as ease and
clarity.
43. There is an availability of expert persons who can
handle foreign direct investment issues.
44. Automated procedures are available in
government’s institutions.
113
45. Governmental service offices (customs, labor
office, and chamber room) are available in all
qualified industrial zones in Jordan.
46. The government operations are decentralized.
47. 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):
Please complete the following questionnaire with specific regard to the above, by placing a (√) in the appropriate box
Str
ongly
agre
e
agre
e
Unce
rtai
n/
not
appli
cable
dis
agre
e
stro
ngly
dis
agre
e
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.
55. Labor law doesn’t distinguish between domestic
and foreign employees which attracts foreign direct
investment.
114
Appendix (2)
جامعة الزرقاء
كلية الدراسات العليا
قسم التسويق
استبانة الدراسة
تحية طيبة وبعد ...
دور عوامل البيئة التسويقية الكلية في جذب األستتممار األجنبتي " حوليقوم الباحث بإجراء دراسة ميدانية
نيك درجةك متطلبات استكماال ل وذلك "، في األردنالمباشر: دراسة تطبيقية على المناطق الصناعية المؤهلة
.جامعة الزرقاءفي التسويقإدارة الماجستير في المعلومووات التووي أرجووو التكوورم بتعبالووة االسووتبانة التووي بووي أيووديكم بكوول دقووة ومودوووأية و وو افية م كوودا أ
د الركيزة إ تعاونكم يع ألغراض البحث العلمي فقطستستخدم و ,أليها ستعامل بسرية تامة يحصل الباحث
الدراسة و ت كرو أليه.إلنجاح هذه األساسية
.والتقدير االحترامفائق قبلوا وت
الباحث إشراف األستاذ المشارك
خالد محمود البدارنة الدكتور زكريا أحمد العزام
0797123695هاتف:
115
الجزء األول: الخصائص الشخصية والوظيفية ألفراد عينة الدراسة:
( أمام اإلجابة التي تتناسب مع اختيارك:√أرجو التكرم بودع إ ارة )
الجنس: .1
أنثى ذكر
العمر: .2
سنة 40 -سنة 31 سنة 30أقل م
سنة 51أكبر م سنة 50 -سنة 41
المؤهل العلمي: .3
دبلوم متوسط ثانوية أامة
دراسات أليا بكالوريوس
المنصب األداري في الشركة: .4
ناالب مدير أام مدير أام
مدير ح
مدير مالي
مدير أداري
مدير تسويق
نوع الصناعة: .5
صناأات كيماوية محيكات
أخرى أغذية
مدة األستممار في األردن: .6
سنوات 5 – 10 سنوات 5أقل م
سنة أو اكثر 11
116
رأس المال )بالدينار األردني(: .7
ألف 100ألف الى 51 ألف 50 –االف 10
ألف 200أكثر م ألف 200 – 101
نسبة المساهمة األجنبية في رأس المال: .8
25% - 50% %25أقل م
51% - 75% 75أكثر م%
عدد العمال: .9
أامل 51 – 100 أامل 50أقل م
أامل 301أكثر م أامل 300 – 101
117
دور عوامتل البيئتة التستويقية الخارجيتة فتي جتذب : يعكس هتذا الجتزء مستتوق تقييمتك لت ) الجزء الماني
(.األستممار األجنبي المباشر
( أمام اإلجابة التي تتناسب مع اختيارك:√أرجو التكرم بودع إ ارة )
درجة الموافقة
الفقرات الرقم
ال أتفق تماما
ال أتفق محايد أتفق
أتفق
بشدة
الحوافز االقتصادية و المالية التي توفرها الحكوموة مو : األقتصادية و الماليةالبيئة
اجل جذب األستثمارات األجنبية المبا رة و لدوما اسوتقرار هوذه األسوتثمارات فوي المناطق الصناأية الم هلة في األرد .
المحور
األول
حوووافز دووريبية كافيووة للمسووتثمري فووي حكومووةتوووفر ال
1 المناطق الصناأية.
2 توفر الحكومة اأ اءات م دريبة الدخل و المبيعات.
الرسووووم الجمركيوووة ألوووى مووودخطت األنتوووا منطقيوووة و
3 مناسبة.
الرسووووم الجمركيوووة ألوووى صوووادرات البدووواالع المصووونعة
4 منطقية و مناسبة.
األجوووراءات الجمركيوووة بوووالتخليو ألوووى الموووواد األوليوووة
5 المستوردة سهلة و ميسرة.
األجراءات الجمركية بالتخليو ألى صوادرات البدواالع
6 المصنعة سهلة و ميسرة.
7 رسوم الطاقة و الكهرباء و المياه منطقية.
8 مناسب. الذي ت رده الحكومة الحد األدنى لطجور
9 يحق للمستثمر أالجنبي تملك ألم روع.
10 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
12 الم هلة. المصانع المقامة في المناطق الصناأية
اجووراءات اسووتقدام العمالووة األجنبيووة للعموول فووي المنوواطق
13 الصناأية الم هلة سهلة و ميسرة.
تتمتع األرد بأت اقات تجوارة حورة موع العديود مو الودول أألجنبيوة و العربيوة مموا يعطيهوا ميوزة لتصودير المنتجووات
14 الى هذه الدول.
118
بأت اقيات اقتصادية و تجاريوة موع العديود أدوية األرد موووو الوووودول أألجنبيووووة و العربيووووة يجعوووول منهووووا جاذبووووة
15 لألسثمارات األجنبية المبا رة.
القواني و الت ريعات التي تدعها الحكومة م اجل تسهيل و جوذب البيئة القانونية:
الصوناأية الم هلوة المبا رة و لدما استقرارها في المناطق األستثمارات األجنبيةفي األرد و ما ي مله ذلك مو مطالموة هوذه الت وريعات و ودووحها و سوهولتها و
ي مل كذلك توفر محاكم و نظام قداالي مختو ب و األستثمار.
ر والمح الماني
القوووواني الموجوووودة حاليوووا جيووودة و جذابوووة لطسوووتثمارات
16 األجنبية المبا رة.
تغطوي جميوع الجوانوب المتعلقوة الموجوودة حاليواالقوواني
17 باألستثمار األجنبي المبا ر.
القوووواني و الت وووريعات التوووي تحكوووم األسوووتثمار األجنبوووي
28 المبا ر مستقرة.
المتعلقة و الت ريعات ال يوجد تدارب بي بنود القواني
19 باالستثمار األجنبي المبا ر.
القووواني و الت ووريعات المرتبطووة باألسووتثمار وادووحة و
20 يسهل ت سيرها و فهمها.
21 قانو العمل ال يميز بي العمالة المحلية و االجنبية.
توووفر الحكومووة محوواكم مختصووة لحوول النزاأووات المتعلقووة
22 باألستثمار األجنبي المبا ر.
23 فترة زمنية مناسبة.التقادي في المحاكم يتم ظم
24 التقادي في المحاكم اف.
طبيعوة النظوام السياسووي فوي األرد و اسوتقراره و مودى توأثير ذلووك البيئتة السياستية:
المبا رة في المناطق الصوناأية الم هلوة ألى جذب و استقرار األستثمارات األجنبية في األرد .
المحور
المالث
السياسي في األرد مستقر مموا يو دي بودوره الوى النظام
25 استقرار األستثمارات األجنبية المبا رة.
يتمتوووع األرد بنظوووام سياسوووي معتووودل مموووا يسووواأد ألوووى
26 استقرار و ت جيع األستثمارات األجنبية المبا رة.
27 يتمتع األرد بعطقات سياسية جيدة مع باقي دول العالم.
سياسووات األرد المعتدلووة جنبتووه أيووة أقوبووات أقتصووادية
28 دولية.
29 الحكومات األردنية مستقرة و قليط ما تتغير.
لدى الحكومة األردنية رغبوة لجوذب و ت وجيع األسوتثمار
30 األجنبي المبا ر لألرد .
31 النظام الحكومي اف.
توفر البنيوة التحتيوة المطالموة لجوذب و ت وجيع األسوتثمار األجنبوي مو ألبنية التحتية:
ناحيووة توووفر المبوواني و الطوورق و المطووارات و الموووانل الطزمووة لعمليووات التصوونيع و للعمليات اللوجستيه و كذلك توفر الم سسات الخدمية مو جموارك و مكاتوب أمول و
المحور الرابع
119
صناأات. كوذلك مودى مطالموة بنوك و غيرها م الم سسات االخرى الطزمة لعمل الالموقع الجغرافي لألرد لت جيع و جوذب األسوتثمارات األجنبيوة المبا ورة مو ناحيوة
قربها م األسواق الدولية و م المعابر و م انل التصدير.
الموقووع الج رافووي لووألرد مناسووب و قريووب موو األسووواق
32 الدوليه.
العنف في الودول المجواورة ال يو ثر سولبا ألوى أسوتقرار و
33 جذب األستثمار األجنبي المبا ر.
م انى كافيوه مموا يجعول أمليوة األسوتيراد و األرد يمتلك
34 التصدير سهلة.
تقووع المنوواطق الصووناأية الم هلووة داخوول األرد فووي أموواك
35 مناسبة.
البنيووة التحتيوووة فووي المنووواطق الصووناأية الم هلوووة )هنووواجر صناأية مستودأات و طرق( مطالمة لقيام الصناأات.
36
بنيوة تحتيوة مطالموة للعمليوات اللوجسوتية األرد تتووفر فوي )طرق موانل بحرية و مطارات(.
37
يتوفر في األرد قطاع مصرفي حديث و قادر ألى خدمة األستثمارات األجنبية المبا رة.
38
يتوووفر فووي األرد خوودمات أست ووارية قووادرة ألووى خدمووة االستثمارات األجنبية المبا رة.
39
40 يتوفر في األرد ايدي أاملة ماهرة.
و ت وومل األجهووزة الحكوميووة المنوووط بهووا تووول البنيتتة األداريتتة و الجوانتتب األجرائيتتة: مهمة ادارة و تسيير و األستثمار.
المحور الخامس
األجراءت الحكومية سريعة.
41
توصوووووف األجوووووراءت الحكوميوووووة و األنجووووواز اليوووووومي
42 للمعامطت بالسهولة و الودوح.
األ وخاو ذوي الخبورة و القوادري ألوى األهتموام يتوفر
43 بقدايا األستثمار األجنبي المبا ر.
وفر فوووووي الم سسوووووات الحكوميوووووة المختل وووووة أتمتوووووة تتووووو
44 لألجراءات.
يتوفر مكاتب خدمات حكومية )جموارك مكتوب أمول و غرفة صناأة( في جميع المناطق الصناأية الم هلوة فوي
45 األرد .
العمليات الحكومية غير مركزية.
46
الموظ ي الحكوميي الذي يتعاملو مق قدايا األستثمار األجنبي المبا ر مدربو ب كل جيد.
47
المتغير التابع )جذب األستممار األجنبي المباشر لألردن(:الجزء المالث:
مع اختيارك:( أمام اإلجابة التي تتناسب √أرجو التكرم بودع إ ارة )
120
درجة الموافقة
الفقرات الرقم
ال أتفق تماما
ال أتفق محايد أتفق
أتفق بشدة
48 لدي الرغبة باألستمرار باألستثمار في األرد .
49 قمت بالتوصية لطخري باألستثمار في األرد .
لووودي الرغبوووة بالتوسوووع باألسوووتثمار فوووي األرد فوووي
المستقبل.50
التسوووووهيطت الحاليوووووة ت وووووجع األسوووووتثمار األجنبوووووي
المبا ر.51
مقارنوووة بالووودول األخووورى فوووي المنطقوووة انوووا افدووول
األرد لألستثمار فيها.52
األسووووتقرار السياسووووي لووووألرد يجووووذب األسووووتثمار
األجنبي المبا ر.53
البنية التحتية في المناطق الصوناأية الم هلوة تجوذب
األستثمار األجنبي المبا ر.54
قانو العمول ال يميوز بوي العمالوة المحليوة و الجنبيوة
مما ي دي الى جذب األستثمار األجنبي المبا ر.55
121
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.
Academic Rank University Name
Professor Amman Arab University 1- Dr. Foad Shek Salim
Professor Applied Scientific Private
University 2- Dr. Ahmad Gadeer
Associated Professor Applied Scientific Private
University
3- Dr. Mamdouh Ziadat
Associated Professor Applied Scientific Private
University
4- Dr. Ghaith Al-Abdalla
Associated Professor Al Al-Bait University 5- Dr. Waleed Al-Awawdeh
Associated Professor Al Al-Bait University 6- Dr. Abdulla Al-Edamat
Associated Professor Yarmok University 7- Dr. Mahmoud Al-Kelany
Assistant Professor Applied Scientific Private
University
8- Dr. Anas Yahia Hadid
Professor Zarqa University 9- Dr. Rudina Othman
Associated Professor Zarqa University 10- Dr. Mustafa Sheik
Associated Professor Zarqa University 11- Dr. Hamza Khraim
Assistant Professor Zarqa University 12- Dr. Abdulfatah Al-Azzam
Assistant Professor Zarqa University 13- Dr. Ayed Muala
122
Appendix (4) The SPSS result
Gender
Frequency Percent Valid Percent
Cumulative
Percent
Valid 1 143 76.5 76.5 76.5
2 44 23.5 23.5 100.0
Total 187 100.0 100.0
Age
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Total 187 100.0 100.0
Education
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Total 187 100.0 100.0
123
Position
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Total 187 100.0 100.0
Type
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Total 187 100.0 100.0
Period
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
124
Capital
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
Frequency Percent Valid Percent
Cumulative
Percent
Valid 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
125
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
126
Cronbach's
Alpha N of Items
.925 54
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .712a .508 .494 .39323
a. Predictors: (Constant), Administrative, Political, Economic &
Financial Environment, Infrastructure, Legal
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 28.842 5 5.768 37.306 .000a
Residual 27.987 181 .155
Total 56.830 186
a. Predictors: (Constant), Administrative, Political, Economic & Financial Enviroment,
Infrastructure, Legal
b. Dependent Variable: Investment
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) .589 .324 1.818 .071
Economic & Financial
Enviroment
.130 .096 .089 1.355 .177 .632 1.583
Legal .048 .070 .053 .680 .497 .447 2.237
Political .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
a. Dependent Variable: Investment
Model Summary
127
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .472a .223 .219 .48864
a. Predictors: (Constant), Economic & Financial Environment
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 1.413 .360 3.929 .000
Economic & Financial
Enviroment
.691 .095 .472 7.281 .000 1.000 1.000
a. Dependent Variable: Investment
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .492a .242 .241 .46291
a. Predictors: (Constant), Legal
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 2.239 .201 11.115 .000
Legal .495 .055 .492 8.955 .000 1.000 1.000
a. Dependent Variable: Investment
Model Summary
128
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .540a .292 .288 .46649
a. Predictors: (Constant), Political
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 1.593 .280 5.689 .000
Political .582 .067 .540 8.726 .000 1.000 1.000
a. Dependent Variable: Investment
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .549a .301 .297 .46333
a. Predictors: (Constant), Infrastructure
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 2.113 .216 9.781 .000
Infrastructure .518 .058 .549 8.929 .000 1.000 1.000
a. Dependent Variable: Investment
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .606a .368 .364 .44076
a. Predictors: (Constant), Administrative
129
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 2.218 .177 12.560 .000
Administrative .494 .048 .606 10.369 .000 1.000 1.000
a. Dependent Variable: Investment
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
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 Legal Political Infrastructure Administrative
Economic & Financial
Enviroment
Pearson Correlation 1 .537** .407** .413** .542**
Sig. (2-tailed) .000 .000 .000 .000
Legal Pearson Correlation .537** 1 .554** .536** .646**
Sig. (2-tailed) .000 .000 .000 .000
Political Pearson Correlation .407** .554** 1 .440** .430**
Sig. (2-tailed) .000 .000 .000 .000
Infrastructure Pearson Correlation .413** .536** .440** 1 .527**
Sig. (2-tailed) .000 .000 .000 .000
Administrative Pearson Correlation .542** .646** .430** .527** 1
Sig. (2-tailed) .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
130
"دور عوامل البيئة التسويقية الكلية في جذب األستثمار األجنبي المباشر"
)دراسة تطبيقية على المناطق الصناعية المؤهلة في األردن (
دأعرار
دخالردمحموردالبراجنه
دأشجاف
دالركتوجدزكجيادأحمردعزام
دالملخص
البلراندللألستثماجداألةنبيدالمباشجدبالعريردمندعوام دالبيئ دالةزئي دوالكلي ،دولكنهادةاذبي دعارةدمادتجتبطد
هذهدالوجق دالبحثي .دتمدفص دهذهدودهذادهودمادسيشك دمحوجدد بالغالبددتجتبطدبشك داوثقدبالعوام دالكلي
اسي ،دالبني دالتحتي ،دودالبني دالعوام دالىدخمس دأبعاردجئيسي دهي:دالبني داالقتصاري دوالمالي ،دالقانوني ،دالسي
األراجي دوالةوانبداإلةجائي .دك دهذهدالعوام دقردتمدتحليلهادوأخذهادبعينداالعتباج،داختاجدالباحثداالستثماجاتد
د) دالمؤهل دالتيدتقعدفيدالمناطقدالصناعي دالمباشجة دفيداألجرندلقياسدQIZاألةنبي دتوزيعدال( دتم فجضيات.
شجك ،دتمداستعارةدد55جكاتدالتيدتقعدفيدالمناطقدالصناعي دالمؤهل دودعررهاداستبان دعلىدةميعدالشد220
استبان دمنهادبسببدنقصدالمعلوماتدفيهادود13دجفض،دبعرداإلطالعدعليهادتمد٪91منهادبنسب دحواليدد200
ت.داالستبيانامندإةماليدد٪93.5استبان دودبنسب دد187بالتاليدفأندعررداألستباناتدالصالح دللتحلي دكانتد
هجتدنتائجدالرجاس دانداكثجدعام دةذبدلالستثماجاتداألةنبي دالمباشجةدهودعام داالستقجاجدالسياسي؛دويليدظا
دأيضاد دالعام داالقتصاريدللبلر دالحكومي . دوالخرم دلإلراجاتدللنظام ذل دالهيك داإلراجيدوالةوانبداإلةجائي
لمباشجة.دودوةرتدالرجاس دأيضادأندمستوىدالبني ديلعبدروجدوأهمي دفيدةذبدواستقجاجداالستثماجاتداألةنبي دا
131
دمند دتزير دأن ديمكن داألجرني دالرول دأن دالرجاس دهذه دمن دالمستخلص دالنتائج دكذل . دكبيجة دأهمي دله التحتي
دلالستثماجاتداألةنبي دالمباشجةدمندخال دالتجكيزدعلىدالحفاظدعلىداالستقجاجدالسياسيدالحالي،دود ةاذبيتها
دبالم دمندخال دتحسيندكذل دالقيام دودأيضا دالتعزيزاتدللشجوطدالقانوني دواالقتصاري ، دمندالتحسيناتدو زير
مستوىدالبني دالتحتي دفيدالرول دوهودأمجدضجوجيدللعملياتداللوةستي دودالتشغيلي دللصناعات،دودكذل دعلىد
جدالحكومي .الرول دالعم دعلىدتعزيزدودتحسيندالةوانبداإلةجائي دوالشفافي دفيدالمؤسساتدودالروائ