The Impact of Foreign Trade on the Total Product Growth of the Manufacturing Sector in Jordan: An Econometrics Study for the Period (1996-2013)

Abstract

This study aimed to identify the impact of foreign trade on the growth of total product of the manufacturing sector in Jordan for the period (1996-2013). The researcher used an econometric model to achieve the study objectives. Furthermore, the results of the study showed that the growth in overall national exports have a positive impact on the growth rate of total product of the manufacturing sector, the growth in total imports (intermediate and capital) have a positive impact on the growth rate of total product of the manufacturing sector, the Jordanian trade contributed to industrial growth, the rate of growth in manufacturing product due to domestic demand and the expansion of exports and replace imports from the demand side, and the rates of growth in production elements  from the supply side, this is consistent with the reality of the manufacturing sector in Jordan because of the disruption of the productive structure of the manufacturing sector and shifts the quality for the productive industries (intermediate and capital) as in feed production activities, particularly industrial activity with production requirements such as machinery and equipment and intermediate goods necessary for the continuation of the production process. The study suggested a number of recommendations such as the necessity to encourage and guide the investment to the manufacturing sectors, The necessity to develop and increase size of industrial exports by various means, as for positive impacts of the exports on growth and development of the manufacturing sector,

Keywords: foreign trade, manufacturing sector, Jordan. Econometric model