Development Zones and Foreign Direct Investment in Jordan

Given its essential role in addressing potential economic shortcomings and imbalances, foreign direct investment (FDI) has long been a major concern for policymakers in most economies worldwide.The concept of development zones has been proposed to encourage and attract new investment, serving as investment incubators by offering numerous benefits and customs exemptions.In 2008, Jordan began experimenting with development zones to attract investment, reduce rising unemployment and poverty rates, and stimulate economic growth.This research aims to shed light on the role of development zones in attracting FDI to Jordan between 1975 and 2023.The autoregressive distributed lag (ARDL) model was used to achieve this goal.The development zone experiment was represented by a dummy variable indicating the period in which the experiment began, which coincided with the establishment of free zones and industrial estates.According to the results, the development zones did not attract the FDI Jordan hoped for.Because these zones have failed to attract investment despite the incentives offered, empirical evidence also shows shortcomings in their management.According to the research, the exemptions and incentives granted to investors in these zones should be reevaluated, smuggling should be combated, and waste in these exemptions should be eliminated.The most significant problems facing these zones should also be examined.