Open AccessThe Impact Of Monetary Policy Using Islamic Or Non-islamic Money Supply On Fdi In Jordan (1980-2018)
Author(s) -
Adham Taher Mohmmad Alessa,
Hartini Mohammad
Publication year - 2021
Publication title -
azka international journal of zakat and social finance
Language(s) - English
Resource type - Journals
eISSN - 2716-6643
pISSN - 2735-1890
DOI - 10.51377/azjaf.vol2no2.61
Subject(s) - money supply , foreign direct investment , islam , economics , inflation (cosmology) , monetary economics , gross domestic product , monetary policy , government (linguistics) , investment (military) , business , macroeconomics , philosophy , linguistics , physics , theology , politics , theoretical physics , political science , law
This study aimed to investigate the impact of monetary policy using Islamic or non-Islamic money supply on FDI in Jordan. Using time series analysis of selected variables during the period 1980 until 2018 using the ARDL model. The objective achieved the appropriate statistical tests such as data stability and co-integration tests have been used. The variables analyzed include the money supply (M2), the Islamic money supply (IMS), the export (EXP), Government Expenditure (GOV), inflation rate (INR), The gross domestic product (GDP) as independent variables. The dependant variable is the foreign direct investment (FDI). This study results in a long-term and short-term statistically significant correlation between the money supply (M2), the Islamic money supply (IMS) and FDI. The Islamic money supply (IMS) has a positive impact and the money supply (M2) has a negative impact on the FDI. The study recommended; the Jordanian government must implement a targeted Islamic monetary policy to attract foreign direct investment in the Jordanian economy. Provide an appropriate environment for investment and to remove the obstacles to investment in general, in order to attract the capital of Jordanians working abroad for domestic investment, as well as for foreign investments.