The Impact of Foreign Direct Investment and Official Development Assistance on Tax Burden: An Analytical Study on Jordan

Mustafa Mohammad Alalawneh

Authors

Mustafa Mohammad Alalawneh

Keywords:

foreign direct investment; official development assistance; tax burden

Abstract

The purpose of this study is to investigate the effect of foreign direct investment and official development assistance on tax burden in Jordan employing the Auto-Regressive Distributed Lags Bounds Testing (ARDL BT) co-integration approach to the data ranging from 1991 to 2018. The results indicated that there is a long-run relationship among variables. The results showed that there is a positive and statistically significant effect of the ratio of foreign direct investment to GDP (FDI) on tax burden (TB) in the long run, and a positive and statistically significant effect of the ratio of official development assistance to GDP (ODA) on tax burden (TB) in the long run. The estimation results indicate that a 1% increase in (FDI) increases (TB) by 0.53%, and a 1% increase in (ODA) increases (TB) by 1.45%. This study is the first of its kind in examining the impact of foreign direct investment and official development assistance together on the tax burden in Jordan.

Downloads

Article PDF

How to Cite

The Impact of Foreign Direct Investment and Official Development Assistance on Tax Burden: An Analytical Study on Jordan. (2020). Global Journal of Management and Business Research, 20(A16), 51-57. https://journalofbusiness.org/index.php/GJMBR/article/view/3277

Download Citation

References

Philippe Aghion, Ufuk Akcigit, Julia Cagé, William Kerr (2016) Taxation, Corruption, and Growth.

George Owusu-Ansah Amoah, -A (2014) Foreign Direct Investment: Attracting Foreign Direct Investment to Ghana: Lessons from the Republic of Korea.

Werner Baer, Antonio Galvão (2008) Tax burden, government expenditures and income distribution in Brazil. 48(2), 345-358.

Yilmaz Bayar, Marius Gavriletea (2018) Foreign Direct Investment Inflows and Financial Development in Central and Eastern European Union Countries: A Panel Cointegration and Causality. 6(2), 55.

E Balıkcioglu, B Dalgıc, B Fazlıoğlu (2016) Does Foreign Capital Increase Tax Revenue: The Turkish Case. 6(2), 776-781.

Ali Al-Daghmin, Sohaib Alhamss, Khloud Al-Qasem, Hani Al-Najjar, Khaled Al-Smadi, Aseel Olaimat, Layana Al-Halbouni (2018) Patterns of management of translocation renal cell carcinoma. 44(6), 467-472.

Central Bank, Jordan (1991) Jordan Housing Sector Review.

Robert Engle, C Granger (1987) Co-Integration and Error Correction: Representation, Estimation, and Testing. 55(2), 251.

D Gujarati, D Porter (2009) Damodar GUJARATI. Basic Econometrics. McGraw-Hill, 1978.. 7(1).

Dora Benedek, Ernesto Crivelli, Priscilla Muthoora, Sanjeev Gupta (2014) Foreign Aid and Revenue: Still a Crowding-Out Effect?. 70(1), 67-96.

(2017) Tripartite: economic growth, taxation and official development assistance (overlap and interconnection).

David Gordon, Eric Leeper (1994) The Dynamic Impacts of Monetary Policy: An Exercise in Tentative Identification. 102(6), 1228-1247.

Warren Maroun, Magda Turner, Kurt Sartorius (2011) Does capital gains tax add to or detract from the fairness of the South African tax system?. 14(4), 436-448.

Metri Mdanat, Manhal Shotar, Ghazi Samawi, Jean Mulot, Talah Arabiyat, Mohammed Alzyadat (2018) Tax structure and economic growth in Jordan, 1980-2015. 13(1), 102-127.

Shahriyar Mukhtarov, Mustafa Alalawneh, Elsevar Ibadov, Ayten Huseynli (2019) The impact of foreign direct investment on exports in Jordan: An empirical analysis. 12(3), 38-47.

Thanh Nguyen, Binh, Manh Nguyen, Hung, Anh Nguyen, Tung, Phuong Dao, Nam, Thanh Nguyen, Long (2017) Robust H-infinity backstepping control design of a wheeled inverted pendulum system.

M Pesaran, Yongcheol Shin, Richard Smith (2001) Bounds testing approaches to the analysis of level relationships. 16(3), 289-326.

M Piancastelli, A Tagem (2001) Aid, taxes and government spending: A heterogeneous, cointegrated panel analysis.

Vito Tanzi (1992) Structural factors and tax revenue in developing countries: a decade of evidence. 267-285.

(2017) The Role of Governance in Attracting Foreign Direct Investment in Arab Countries. 6(12), 1458-1465.

Robert Chirinko, Daniel Wilson (2006) State Investment Tax Incentives: What Are the Facts?. 1.000-25.000.

(1991) Hashemite Kingdom of Jordan.

Hermann Yohou, Michaël Goujon, Wautabouna Ouattara (2016) Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries. 25(3), 468-498.