Economic Theory - Airline Industry Essay Example | Topics and Well Written Essays - 2500 words

Economic Theory - Airline Industry - Essay Example This paper examines the economic profile of the airline industry paying attention to issues such as shifts and price elasticity of supply and demand, positive and negative externalities, wage inequalities and monetary and fiscal policies. The first part of the report provides an overview of the airline industry while the second part of the report focuses on the above listed variables. Air transport today is one of the largest industries in the world. For example, the scheduled airline industry generated revenues of nearly $375 billion in 2004 (British Airways Fact book 2006). According to BA Fact Book (2006), over half a billion passengers were carried on international scheduled services with this figure having grown at an annual average rate of more than 6% since 1970, when the then corresponding number of passengers was 75 million (British Airways Fact book 2006). Many commentators for example have long argued that, aviation has an overall economic impact far in excess of its turnover (Riggas 2001). Here, Boyd (2000) argues that the network of air transport services facilitates growth in output and employment, and at the same time international trade and investment, tourism, and living standards (Boyd 2000). BA Fact Book (2006) refers to Air travel as â€Å"a vital artery that reinforces the process of globalisation, allowing it to transform the way in which many other industries carry out their business† (BA Fact Book 2006:5). In response to the rapid growth in business travels in recent years, the airline industry has witnessed rapid growth in the last four decades. Rigaes (2002) postulates that, one argument in favour of the present state of the airline industry is positive externality. Thus such a higher growth in the sector is due to global mobility that outweighs the microeconomic losses and justifies continuing government intervention. The industry is also

Banned Books Essay Example | Topics and Well Written Essays - 750 words

Banned Books - Essay Example Likewise, key examples will be illustrated that show some of the common trends and underlying causes for both past and current censorship that exists in the world. Furthermore, the reader will be able to understand key trends and underlying motives that encourage power structures to take such a drastic approach to seeking to stamp out a given idea/set of ideals. Perhaps one of the most famous examples of censorship is that which surrounded the Soviet Union and the communist party control that dominated nearly every aspect of public and private life. As a means of near total control over such a society, censorship was readily employed to direct and influence the way in which â€Å"foreign† ideas were injected into the society (Plamper 528). To accomplish this, the communist party employed a rigid structure whereby incoming literature and books would need to be approved by the relevant authorities prior to reaching widespread distribution. This structure of censorship is perhaps the most extreme example that our world has witnessed within the past 100 years; however, it is not the only example of a society that has employed censorship, to Ð ° great effect, in order to mould and direct, the social evolution of its populace. Similarly, censorship exists currently in a number of nations; however, the lion’s share of censorship in the current world is derived from a fear of the spread of a foreign religion within a host country and/or region. This is evidenced by strong censorship laws that exist in many Islamic countries. These laws ban everything from the distribution of religious material to â€Å"immoral† texts that can include anything from â€Å"unislamic† attitudes, styles of dress, forms of music and a host of other culturally derived points. A few of the countries that exhibit a high degree of censorship with regard to books and literature are Saudi Arabia, Eritrea and the Islamic Republic of Iran (Information Providers 100). A s imilar situation exists within what most readers might consider a highly democratic country – Germany. However, Germany’s case is somewhat different than the other nations that have thus far been listed in this brief analysis. Germany has placed a ban on many of the Nazi era publications and propaganda pieces to include Adolph Hitler’s Mein Kampf. According to pertinent government institutions and officials this has been done in order to allow the populace a reprieve from the painful and harmful vitriol that was common and circulated around GermanÃ'Æ' a few brief decades ago. Germany of course is the aberration to the rule in that this is a nation that enjoys a wide array of democratic freedoms, elections, freedom of expression/thought and a wide range of freedom of speech and freedoms of the press. However, as a function of the dangers that Nazism has presented the nation, they have chosen to implement a ban on all such material in the hope that doing so will s eek to hasten the healing of many war-era wounds that were caused as a direct effect of the policies and actions implemented by the Nazis government. Although the United States supposedly enjoys freedom of the press and freedom of thought, the United States itself has experienced a long and sordid past with relation to censorship. This censorship has primarily been concentric around education in that certain individuals, teachers, parents and/or government

Multi-Cultural and Political Society Essay Example | Topics and Well Written Essays - 2750 words - 2

Multi-Cultural and Political Society - Essay Example In a political society like America, several interest groups are present, which are based on religious, racial, economic, political, or occupational (Ogene 24). Each of these groups always tries to place their self-interest ahead of their national interest which has been a major issue addressed by various scholars in the American society. Madison’s dilemma is the conception with the American political system, a system where people are at liberty to express their opinions and are given the privilege to petition the government on certain issues (Rosenau 46). In such system, pursuance of self-interest ahead of national interest is visible. The pursuance of self-interest ahead of national interest has been the concern of major stakeholder in the American polity. With the major actors stuck in the middle of whether to subvert self-interest group. A situation that would likely undermine the freedom of speech and rights of the citizens which portends the rise of an autocratic government that will degenerate into the oppression of the masses, or either maintains the political freedom operating in the system as being recognized in the democratic tenets. Nevertheless, granting political freedom to American populace would expose the system to circumstances that could hinder the growth of the political system (Rosenau 39). Interest groups in a democratic society are the various groups that seek to influence governmental decisions in a way to favor their interest (Ogene 12). They also help in the articulation and aggregation of interest in a way to make the decision-making process less cumbersome for political office holders. In the United States of America, there are different ethnic groups that are present due to their multi-ethnic and interracial background. Freedom of expression as a fundamental principle in a democratic system, allows the public to voice their opinion on various governmental policies.

Hotel Chocolat's Strategic Choices Essay Example | Topics and Well Written Essays - 4000 words

Hotel Chocolat's Strategic Choices - Essay Example The company started as Choc Express and in 2003 rebramded to be the known Hotel Chocolat Company. The firm’s founders have the required knowledge and skills to run the business. For instance, Angus went through the Business Growth and Development course at Cranfield School of Management. Amazingly, today Hotel Chocolat Company operates in more than 33 locations in England with 70% of the customers trading from the firm’s website (Barrow & Molian, 2005). The following is a report on the major strategic options facing Hotel Chocolat Company as well as the potential future strategic position of the firm. The report also provides specific recommendations in respect to the Hotel Chocolat Company. The report achieves these objectives through three main parts; A, B, and C. Part A The major strategic options facing Hotel Chocolat As a company's business, Hotel Chocolat is faced with many options that can steer up expansion of the company and that of the market sales (Gelderman & Weele, 2002). I will discuss these options one after the other and give an explanation of the same on how they work, when should they be implemented. The result of this is that it is going to propel the company to a potential future strategic position. ... ducts in a unique way than their competitors and providing their customers with their need, wants and desire more effective than others (Bertoldi, Giachino & Marenco, 2012). This model works with the assumption that a customer accepts any product offered based on the apparent value for money. The model is based on the a number of perception of the product and service offered against a price tag such that the same product or service can offer different price depending how it is perceived by the customers. I recommend the strategic clock model because it combines a low price, low perceived benefit with focus given to a price sensitive market segment. However, there may be price sensitive customers with low purchasing power and who cannot afford to buy better quality products but most customers do not differentiate or value the difference in the goods offered. Also to build on the customer loyalty, the executive group of the Hotel Chocolat Company can introduce loyalty cards which will contain customers with the products of the Hotel Chocolat’s company only (LeBoeuf et al, 2011). This is achieved by offering frequent customers with loyalty cards and proving them with incentives and discounts when purchasing at any of the stores, outlets and supermarkets particularly selling products of the Hotel Chocolat’s company. Another option that the Hotel Chocolat Company can implement is production differentiation (Gelderman & Weele, 2002). This aims at offering benefits that is completely different from those of the competitors. Of course the Hotel Chocolat Company also faces competitions from other beverage companies which either acts as substitutes or complements to their products such as tea among others. Therefore, to achieve a competitive advantage than other companies,

Core Competency Essay Example for Free

Core Competency Essay Walt Disney once noted: â€Å"I only hope that we don’t lose sight of one thing – that it was all started by a mouse†. (Disney Dreamer, 1998). Walt Disney’s original core competence was cartoons and animated movies. By combining Imagineering with engineering Disney’s company reached unparalleled success with the creation of the first full length animated movie. This success led to new ideas and one of them was to open a park, a different kind of park. In Disneyland Walt used new technology to bring his characters to life. He called them â€Å"Animatronics†. (Magical Kingdoms, July 2008) Together with unique storytelling and high quality of service Walt Disney created a magical environment for his guests which none of the competitors could quite duplicate. It became Walt Disney’s core competency. Disney once said: â€Å"Anything that has the Disney name to it is something we feel responsible for.† (Disney Dreamer, 1998) This competency is driven by superior Disney products and most of all by cast members and their renowned guest service. It’s always been a challenge to keep up with high expectations of the guests. To continue to improve its business Disney has set up new cast member standards in the form of the Basics (Meeting the new standards, December 2007). The new standards expect cast members to create and reinforce â€Å"magical† experience for the guests by being approachable, engaging, and willing to go above and beyond. As the company developed, many new lines of businesses have been added such as retail, media, and sports. The danger has been to overextend and lose track of what the company does best. In order to stay competitive the company had to realign and shifted attention from retail to those which are the cornerstone of the company – intellectual property. To reinforce its animation business Disney purchased Pixar in 2006. In the acquisition statement it read: â€Å"Animation is the foundation upon which the Company was built and for years was a core competency. However, in recent years Disney placed less emphasis on animation and, as such; the Company was not at the forefront of the digital revolution and did not produce many animation movie hits. With Pixar, Disney is now further on the technology curve and can  exploit some synergies in marketing, production, and distribution.† (Walt Disney Company release, January 2006). In 2009 Disney purchased another company, Marvel. This move further enhances Disney’s competitiveness and extended the collection of its characters. (CNN, August 2009). The special strength of the company is diversification. In addition to four parks in the US Disney currently has a park in Europe, plus two parks and one more on the way in Asia. Disney’s largest sales revenue is from media sold outside the US. Disney has its own cruise line with regular operation of two boats and is adding two more in January of 2011. (Cruise Talk, June 2010) Many regular Disney guests own part of the Walt Disney World resort through â€Å"Disney Vacation Club†, the company’s timeshare program. Disney’s tour operation business â€Å"Adventures by Disney† offers guests special tours around the world. (Adventures by Disney, n.d.) Everything the company does carries the special â€Å"Disney touch† – a seal of quality and outstanding service. Though the company has some challenges with the economic downturn, it continues to grow leaning heavily on what the company does best providing â€Å"magical† experiences to guests and consumers. References: Disney Dreamer (1998), Walt Disney Quotes. Retrieved from: http://www.disneydreamer.com/walt/quotes.htm Josh Buchanan, Matthew Covarrubias, James Gills, T.J Lovejoy, Craig Wuollet, Meeting the new Standards (December, 2007), Executive Summary, P. 3 Retrieved from: http://www.slideshare.net/jamesrg6/disneypaperfinal Walt Disney Company release (January, 2006) Comments on Acquisition of Pixar Animation Studios. Retrieved from: http://www.dbrs.com/research/206997/walt-disney-company-the/comments-on-acquisition-of-pixar-animation-studios.html David Goldman (August, 2009), CNN, Disney to buy Marvel for $4 billion Retrieved from: http://money.cnn.com/2009/08/31/news/companies/disney_marvel/index.htm The History of Disney’s Animatronics (July, 2008), Disney Blog at Magical Kingdoms Retrieved from: http://www.magicalkingdoms.com/blog/2008/07/08/the-history-of-disneys-audio-animatronics/ Mr. Papa (June, 2010) Cruise Talk Retrieved from: http://cruisetalk.org/2010/06/disney-cruise-line-adds-final-building-block-to-new-cruise-ship-disney-dream.html Adventures by Disney, Retrieved from: http://abd.disney.go.com/abd/en_US/index?name=HomePage

Physical and Psychosocial needs of Palliative Clients

Physical and Psychosocial needs of Palliative Clients Addressing Physical and Psychosocial needs of Palliative Clients Jaweria Bano Death and dying are certainly unescapable events in human’s life. Palliative is patient and family centered care that enhances quality of life. It is an approach that enhances life of an individual and their families challenging the issues connected with life-debilitating sickness, through the curative action and help of suffering. Palliative mind all through the continuum of sickness includes tending to physical, scholarly, enthusiastic social, and otherworldly needs and to encourage understanding self-sufficiency, access to data, and decision of consideration According to Loscalzo (2008), Institute of Medicine (IOM) report defines palliative care as â€Å"prevention and relief of suffering through the meticulous management of symptoms from the early, through the final stages of an illness.Palliative care attends to the emotional, spiritual and practical needs of patients and those close to them.† A case scenario related with providing palliative care to an adolescent client was encountered in an Ibn-e- Zuhr building. A 16 year old boy was suffering B-cell lymphoblastic leukemia and was admitted in daycare for his third chemotherapy cycle. While taking his interview I came to know that he was in his usual state of health 4 years back, suddenly he developed fever for 4 months on and off, cough at midnight for 1 month and shortness of breath for 2 week for this he went to nearby hospital in Lahore. Where many diagnostic procedures like CBC and bone marrow biopsy were done and doctor referred him in Karachi for chemotherapy. While interviewing, he verbalized that due to chemotherapy he felt nauseated, and had many episodes of vomiting. Moreover, he had complained of weight loss, fatigue, dyspnea and alopecia. He also verbalized that he had feeling of loneliness and anxiety due to the disease. Patient‘s family said that he is not interact in family and isolate himself. This issue caught my attention; I began to feel the same feeling and concern which my patient was going through at that time. My emotions had totally exceeded my ability to think. As a nursing student, it is my obligation to give comprehensive consideration to the patient and also his family. During patient care I recognized many domains which were affected, like psycho-social, spiritual, physical and communication. Here all spaces of palliative consideration are interrelated to one another yet I will highlight the two most influenced areas: psycho-social and physical. These papers will high light on the concerns, interventions and recommendations regarding physical and psycho-social domains of palliative care. Patient history revealed physical suffering that is like paling of eyes, dryness of skin and mouth, dyspnea. Diseased process or medications effects on his activity level and decreased appetite. Due to reduced activity and side effects of treatment her appetite had also decreased. As a consequence of decreased appetite and frequent hospitalizations he had lost significant weight in last six months (5-6kg). The difficulty in breathing did not let him sleep peacefully which in turn caused frequent mood swings and irritability in his personality. He also felt embarrassment in socializing and stayed at home due to alopecia. Referring to the case, symptom relief is the most evident need of the physical domain of palliative care. This is due to the fact that physical problems are closely related with psychological, spiritual and social issues and thus may adversely affect the overall quality of an individual’s life whereas palliative care chiefly aims to improve the quality of life rather than the length of life (Stevens, Jackson Milligan, 2009). For that reason, I approached the patient by focusing my care on the most discomforting issue that is of dyspnea. Firstly, patient’s dyspnea was managed by non-pharmacological methods that include performing deep breathing, pursed lip breathing and coughing exercises for 10 minutes every hour (Viola et al., 2008). Anemia is also a possible cause of dyspnea and fatigue (Borneman, 2013) which was also evident in the current case where hemoglobin level was just 10.3 mg/dl. Patient was positioned in semi fowlers’ position and spirometry exercise s were taught to the patient. Since pain was due to physical exertion so it also improved once dyspnea was settled. To reduce patient suffering and enhancing quality of life I educate patient besides, a teaching session was delivered to client and family members on importance of good nutrition, in which it was emphasized to take high energy, high protein diet not just to correct dyspnea but also to minimize weight loss and fatigue by promoting repair of damaged tissues (Holmes, 2011). Frequent water intake was also encouraged in order to minimize dryness of mouth. Issue of maintaining functional independence was handled by planning activities and rest periods according to energy level. Assistance was provided in self-care activities (Kumar Jim, 2010). Psychosocial area of palliative consideration alludes to the nearby relationship between the individual and the aggregate parts of any social. The patient was also experiencing psychological distress, anxiety and depression. The suffering was intolerable for the patient. Additionally, he was unable to tolerably cope with him condition as evidenced by him social isolation compromising the psychosocial aspect of patient’s wellbeing. Though the family was not well managed financially, patient’s family constantly kept worrying about the cost implications due to his frequent hospitalizations, treatment procedures, medications and chemotherapy etc. Similarly, humans as social beings, share their joys and burdens through social interactions. The family members of the patient also reported their observation that he doesn’t want to get involved in family gatherings and other such activities and would prefer isolation. However, I encouraging my patient to ventilate and ver balize his feelings, thoughts and views. Similarly, a teaching activity regarding emotional coping was practiced that included anxiety managing and guided imagery (Onyeka, 2010). I also guide the family that welfare is available in AKU. Family was given passionate help and was stressed on own wellbeing support. It is commonly observed that member who is in hospital with patient has distinctive stress related to household chores, children’s and families critical for life. Anxiety may also arise in response to sickness related stressor as saw for our situation that not just patient, family was additionally on edge about support persistent, difficulty process and it disgusting reality (Alacacioglu et al., 2013). The whole journey of palliative care is no doubt a most challenging aspect of nursing profession. Yet, the essence of both palliative care and nursing are fundamentally similar and that is to relieving suffering of mankind by all possible means. In the same way, the task of caring the palliative client was in fact a difficult task. Despite of all the nursing efforts, holistic care was still lacking few aspects due to certain boundaries like time limitation, problem while communicating to patient’s which was resolved to an extent and in capability in dealing with cultural influences on client’s well-being. Furthermore, lack of resources and limited theoretical knowledge also caused hindrance in care and it is the central problem in developing countries. To conclude palliative consideration nursing is another idea. It is additionally developing in our nation yet on a moderate step and uncommon endeavors are obliged to enhance this field. More mindfulness projects and explores ought to be directed to approach comprehensive consideration amid the days ago of an understandings life Nurses must also join this specialty in hospital and community settings to enhance the quality of lives of patients suffering from terminal illnesses. References Alacacioglu, A., Tarhan, O., Alacacioglu, I., Dirican, A., Yilmaz, U. (2013). Depression and anxiety in cancer patients and their relatives. J BUON, 18(3), 767-774. Borneman, T. (2013). Assessment and management of cancer-related fatigue. Journal of Hospice Palliative Nursing, 15(2), 77-86. Holmes, S. (2011). Importance of nutrition in palliative care of patients with chronic disease. Primary Health Care. 21(6), 32-38 Kumar, S. P., Jim, A. (2010). Physical therapy in palliative care: from symptom control to quality of life: a critical review. Indian journal of palliative care, 16(3), 138. Loscalzo, M. (2008). Palliative Care and Psychosocial Contributions in the ICU.Pain Management and Supportive Care for Patients with Hematologic Disorders. Pp. 481-490. Onyeka, T. C. (2010). Psychosocial issues in palliative care: A review of five cases. Indian journal of palliative care, 16(3), 123. Stevens, E., Jackson, S., Milligan, S. (2009). Palliative nursing across the spectrum of care. United Kingdom, UK: Wiley-Blackwell. Viola,R., Kiteley,C., Lloyd,N.S., Mackay,J.A., Wilson,J., Wong,R.K. (2008). The management of dyspnea in cancer patients: a systematic review. Supportive Care in Cancer. doi:10.1007/s00520-007-0389-6.

Effects of Foreign Direct Investment on Jordan

Effects of Foreign Direct Investment on Jordan Chapter 1: Introduction Problem background Foreign direct investment has become the major economic driver of globalisation, accounting for over half of all cross-border investments. for example, approximately $1 trillion in greenfield investment was announced by companies in 2007, creating about 3 million jobs in their overseas subsidiaries. Companies are rapidly globalising through FDI to serve new markets and customers, map out their value chains in the most efficient locations globally, and to access technological and natural resources. A government of another country may also decide to invest in other countries through the direct provision of grants to developing countries. Foreign direct investment is often used by multinational companies as a means of extending their manufacturing to countries abroad. Foreign direct investment by multinational firms is said to have grown tremendously over the last two decades even above trade flows. (Markusen and Venables, 1999). International economic activity increasingly involves foreign production and intra-firm trade by multinational firms and it is now estimated that approximately 30% of world trade is intra-firm. (Markusen and Venables, 1999). Despite the growth in FDI, Markusen and Venables (1999) suggest that we have a poor understanding of the ways in which direct investment is just a simple substitute for trade, as well as the ways in which it is something quite different. Countries often offer incentives to foreign investors in a bid to lure them to invest in domestic firms. These incentives come in the form of trade policy concessions, financial assistance and tax breaks. (Girma, 2001). For example, Girma (2001) notes that the British government provided the equivalent of $30,000 per employee to attract Samsung to North East England and $50,000 per employee to attract Siemens to Newcastle. (UNCTAD, 1996). This incentive packages are justified on the grounds that productivity gains would be accrue to domestic producers from knowledge externalities generated by foreign affiliates. (Smarzynska, 2002). Furthermore, Girma (2001) suggests that these incentive schemes have been justified on the grounds that the facilitate the creation of jobs, as well as regional development. It is often believed that there is a productivity gap between foreign owned firms and domestic firms and the attraction of foreign direct investment can help bridge this gap due to the potential for spillovers. Girma and Wakelin (2000) suggests that spillovers would have regional dimension for a number of reasons. Spillovers can result from the direct contacts with local suppliers and distributors. This may arise from upward and downward linkages which may be local in nature thus minimising transport costs and facilitating communication between the supplier/distributor and the Multinational firm. (Girma and Wakelin, 2000). In addition, multinationals provide training to employees which increases the turnover of labour thus creating another avenue for spillovers. (Haacker, 1999) cited by Girma and Wakelin (2000). (Girma, 2001). However, Smarzynska (2002) suggests that there is little conclusive evidence indicating that domestic firms benefit from foreign presence in their sector. It has also been suggested that multinational firms have an incentive to prevent information leakage that would improve the performance of their local competitors in the same industry but at the same time may want to transfer knowledge to local suppliers in other suppliers. Smarzynska (2002). As a result, spillover effects from foreign direct investment are more likely than not to take place through backward linkages, that is, through contacts between domestic suppliers of intermediate inputs and their multinational clients. Smarzynska (2002). One would reasonably expect foreign direct investment to have an impact on the economic growth of a country. Foreign direct investment is said to provide a number of benefits to the receiving country through technological transfers, knowledge transfers etc. for example, for example, Borensztein et al. (1998) employ a model of technology diffusion to show that the rate of economic growth of a backward country depends on the extent of adoption and implementation of new technologies that are already in use in leading countries. Carves (1974) had earlier suggested that foreign direct investment influenced host country conditions through two main channels. Firstly, foreign direct investment should result in technological transfers to host country firms. This should be so because multinational companies provide subsidiaries with an efficiency advantage which should indirectly generate spillover effects to other domestic firms irrespective of whether they are subsidiaries of the multinational company or not. Secondly, multinational presence could also have negative effects on domestic firms as this would result into an increased level of competition in the host country. As far back as the 1970s, many host country governments and some economists viewed multinational investment as detrimental to host economies’ welfare and development, creating monopoly situations that exported those economies and stifled local competition. (Markusen and Venebles, 1999). The view in the 1990s was however considerably different and more optimistic, suggesting that multinationals have important complementaries with local industry and may stimulate development in host economies. (Markusen and Venables, 1999). In the absence of any microeconomic imperfections, a small foreign direct investment (FDI) project will have no effect on host economy welfare, so if a case is to be made for gains and losses, it must rest on the possibility that FDI creates or interacts with distortions in the host economy. (Markusen and Venables, 1999). 1.2. Motivation of the study Jordan remains a major region of inward foreign direct investment. Studying the impact of foreign direct investment on Jordan’s economic growth can be justified for a number of reasons. FDI theory suggests that multinational firms have firm specific assets which imply that the may also have higher productivity than domestic firms as a result of the superior technological knowledge, access to international networks and management structure. (Girma, 2001). A company with high foreign direct investment is therefore expected to be capable of benefiting from a substantial increase in net exports which is a major determinant of economic growth. According to Girma (2001) the fact that multinational companies have higher levels of productivity growth indicates that the host country should enjoy two main benefits: (1) the host country should benefit from new production facilities or benefit from the rescue of failing firms in the case of acquisition, potentially raising output, employm ent and exports; (2) foreign firms should be unable to internalise their advantages fully which should enable domestic firms to benefit from spillovers. (Girma, 2001). The combined effects of these benefits should therefore result in high levels of economic growth. It is therefore essential to test these propositions using data on Jordan. Foreign direct investment has been carried out in many other countries mostly in the Western countries such as the United Kingdom, United States, Germany, China, etc. The literature seems to be lacking in terms of Jordan. With increasing growth in multinational activity and increase concern as to whether FDI contributes to the general welfare of an economy, it is the interest of this paper to understand whether FDI contributes to the economic growth of a country, making reference to Jordan as a case study. Most of the studies on foreign direct investment have focused on the spillover effects of FDI activity to domestic companies. In addition, most of the studies have been carried out using microeconomic analysis. This paper considers the problem from a macroeconomic perspective by studying the direct relationship between FDI activity and economic growth on Jordan. 1.3. Objectives of the Study. The objective of this study is to model the effects of foreign direct investment on Jordan by using aggregate macroeconomic data over the period 1976 to 2006. To isolate the effects of other macroeconomic variables on economic growth and to improve the overall significance of the model, the neoclassical growth model will be employed. 1.4 Significance of the Study. The study will serve as a yard stick for policy makers when designing macroeconomic policy in relation to incentives related to the attraction of foreign direct investment in Jordan, openness of the economy, designing monetary and fiscal policy in Jordan. The research will also serve as a guide for further research to students and researchers interested in studying the impact of foreign direct investment on the economic growth of Jordan. 1.5. Limitations of the Study. Chapter 2. Literature Review 2.1 Definition of Foreign Direct Investment. Foreign direct investment is defined as the process whereby a company in one country makes a physical investment to build a factory in another country. These include investments made to acquire lasting interest in enterprises operating outside the economy of the investing company. Foreign direct investment is often promoted by multinational companies when they decide to expand their manufacturing or businesses abroad. Foreign direct investment is also considered to be a diversification strategy pursued mostly by multinational companies which involves the purchased of assets, usually associated with manufacturing or distribution facilities, in another country. FDI is often regarded as the second stage of overseas involvement after agency or licensing agreements have been used to establish a market. Investors in such companies find it more appropriate to reinvest the earnings generated from foreign activities due to the difficulties entailed in the repatriation of profits, as well as t he differences in tax systems that may make it more efficient to retain earnings and reinvest overseas, than to bring them home. 2.2 Determinants of Foreign Direct Investment According to Lim (2008) citing Dunning (1996, p. 56) there are four types of motives behind the FDI activities of multinational firms. These include resource seeking, market seeking, efficiency seeking, and strategy asset capacity seeking. (Lim, 2008: p. 40). These are referred to by the UNCTAD as economic determinants. (Lim, 2008). A host country’s policy framework and business facilitation also plays an important role in determining MNCs’ FDI activities. These include the size of the domestic market, institutional and political environment of the host country, the number of distribution channels, the level of financial development, the taxation policy of the host country etc. According to James (2008) the level of financial development may affect the level of foreign direct investment. Accordingly, financial development acts as a mechanism in facilitating the adoption of new technologies in the domestic economy. (James, 2008). It has also been suggested that the build ing of distribution channels in the host country may also affect the level of foreign direct investment. (Stoian and Filipaios, 2008). This indicates that the more distribution channels a firm can build and the more easy it is to build these channels in the host country, the higher would be the likelihood that the multinational company will make an investment in the host country. Another important factor is the political environment of the host country. It has been suggested in the literature that there is a relationship between broad indices of socio-political instability and institutional quality, political freedom and democracy and FDI. (Kolstad and Vollanger, 2008). The political environment of the host country is therefore an important determinant of FDI. Conventional wisdom detects that high levels of political and social stability, high political freedom, high institutional quality, and high levels of democracy will facilitate the levels of FDI. On the contrary, a country tha t performs poorly on the latter indices of political and institutional factors runs the risk of attracting little or no FDI. The size of the domestic market also influences foreign direct investment. (James, 2008). The larger the size of the domestic market, the higher will be the level of FDI as multinational firms scramble to reap the benefits of economies of scale (economies of scale represent the advantages a firm enjoys because of the fact that it is operating on a large scale. Taxation policies both in the home and host countries may also affect the level of FDI. For example, Hartman (1981) suggests that since the repatriation of earnings to the home country investor and not earnings themselves form the source of the tax liability, the foreign source income should affect investment differently depending on the required transfers of funds within the firm. Consequently, in order to maximise after tax profits, a firm should finance its foreign investment out of foreign earnings t o the greatest extent possible. This further indicates that the required return on investment abroad increases at the point at which foreign investment just exhausts foreign earnings. (Hartman, 1981). Foreign direct investment is also determined by corporate governance. For example, Lien et al. (2005) provide evidence that the presence of a large number of supervisors is associated with FDI outside China, which is consistent with resource strategy views on corporate boards. They also find that family control and share ownership of domestic firms are associated with FDI strategy. There is also an observation of a negative relationship between foreign share ownership in Taiwanese foreign firms and FDI decisions. (Lien et al., 2005). Wu and Radbone (2005) observe from Shangai data that different local factors determine the location of different patterns of FDI. For example, Wu and Radbone (2005) suggests that the development characteristic of urban districts is an important determinant of the location of service and manufacturing FDI. They provide evidence suggesting that service FDI tends to aggregate in the areas that already have a high density of service activities whereas manufacturing FDI prefers to locate in central government-designated areas where incentives and preferential treatment are present. (Wu and Radbone, 2005). 2.3. Foreign Direct Investment Around the world A number of studies have been carried out on FDI in different countries across the globe. These include, the United Kingdom, the United States, Germany, France, Developing countries, emerging markets such as China, India and Brazil. 2.3.1 FDI in the UK. It has been suggested that the United Kingdom is the most successful national location for new foreign manufacturing investment entering the European Union. (Hill and Munday, 1994) cited by Driffield and Munday (1998). For example, the United Kingdom attracted net inward foreign direct investment of approximately  £27.2billion between 1987 and 1993 and estimates show that foreign manufacturing firms in the UK employ more that 78,000 people, and account for more that one quarter of UK manufacturing net output sales. (Driffield and Munday, 1998). Major contributors to foreign direct investment in the UK include companies from the United States, Germany, France and Japan and the major vehicle for this inward foreign direct investment is the acquisition of domestic UK companies. (Child et al., 2000). Girma (2001) investigating the presence of productivity or wage gap between foreign and domestic firms in the UK, as well as whether the presence of foreign firms in a sector raises the productivity of domestic firms provide evidence that foreign firms achieve greater productivity that domestic firms and pay higher wages. There is no evidence of intra-industry spillovers. (Girma, 2001). The findings from this study are inconsistent with an earlier study by Girma and Wakelin (2000) which suggests that domestic firms gain from the presence of multinational firms in the same sector and region, but loose out if the firms are located in a different region but the same sector. In addition Girma and Wakelin (2000) suggest that spillover e ffects are also influenced by the characteristics of the region. For example, less developed regions are found to gain less from spillovers than other regions, sectors with high levels of competition gain more, and sectors with low technological gap between foreign and domestic firms benefit from higher spillovers. (Girma and Wakelin, 2000). Table 1 below shows the trend of direct investment into the UK between 1986-95. Table 2.1.: Trend of direct investment into the UK 1986-1995 Source: Child et al. (2000). It can be observed that the USA remains the major contributor of FDI to the UK as observed from its increasing trend of FDI to the UK over the period 1986 to 1995. One can also observe that Japan has also been a major contributor but the FDI from Japan to the UK in the years to March 1993/95 witnessed a significant drop from  £1,085.00million in the years to March 1990/93 to  £109.1million. Germany has also been a major contributor with an increasing trend of FDI to the UK. France has been contributing the least among the four countries but the trend increased from  £59.2million in the years to March 1992/93 to  £1,188.2million in the years to March 1994/95. One can also observe that these four countries accounted for the highest proportion of FDI to the UK over the proportion ranging from approximately 73.0% ro 81%. Their share of FDI however witnessed a declining trend between the period 1986/7 and 1992/3. Their share of FDI to the UK again rose from 70.8% in 1992/3 to 80.9 % in 1994/5. Driffield and Munday (1998) observed whether the extent to which foreign direct investment in selected UK manufacturers has an impact on the report profit of domestic firms. The evidence suggests that in addition to having an impact on domestic market share, entry by foreign firms also has an impact on the domestic cost conditions which leads to a high probability that the profits of the domestic firms may be reduced. 2.3.2 Foreign Direct Investment in the USA. 2.3.3 Foreign Direct Investment in Asia 2.3.4 South America 2.2.5 FDI in the Euro Area. 2.4 Foreign Direct Investment in Jordan. Jordan falls among the countries classified by the United Nations Conference on Trade and Development (UNCTAD) as â€Å"front-runners†. These include countries with high FDI potential and performance. (UNCTAD, 2008). Apart from Jordan, other countries classified as front-runners include Azerbaijan, Bahamas, Bahrain, Belgium, Botswana, Brunei Darussalam, Belgium, etc. (UNCTAD, 2008). For example, Jordan ranked number 7 in the 2004-2006 FDI performance index of the UNCTAD. This marked an improvement based on the 2003-2005 FDI performance index which ranked Jordan 19th. (UNCTAD, 2008). 2.5 Literature Review There has been a lot of studies ob how foreign direct investment affects the economic growth of a country. However, most of the studies have focused their attention of firm level data using a small sample of firms to test their hypothesis and later on generalise results to the country as a whole. In addition, most of these studies have focused on how foreign direct investment increase productivity growth with particular emphasis on the marginal physical products of factor inputs such as labour and capital. A number of studies have been carried out on foreign direct investment ranging from the determinants o foreign direct investment, impact of foreign direct investment on economic growth, foreign exchange rates and foreign direct investment, taxation and foreign direct investment, spill over effects of foreign direct investment, etc. In this section of the paper a number of these studies will be reviewed so as to see where there are still gaps in the literature. As concerns the deter minants of FDI, Kolstad and Villianger (2008) employs firm level FDI data from 57 countries over the period 1989 to 2000, to examine the host country determinants of FDI flows in services as a whole, and in the major service industries. Their results suggest that institutional quality and democracy are more important for FDI in services than general investment risk or political stability. Specifically Kolstad and Villanger (2008) observe that democracy affects FDI to developing countries only, indicating that the absence of democracy is detrimental to investment below a certain treshhold. Consistent with the observation that many services are non-tradable, Kolstad and Villager observe that service FDI is market-seeking, and unaffected by trade openness. Stoain and Filipaios (2008) suggest that Greek firms invest primarily in similar countries with small market size, and open economies. High bureaucratic quality and rule of law are also found to be essential determinants of the FDI d ecisions of Greek firms while the existence of high corruption serves as a deterrent to FDI. (Stoain and Filipaios, 2008). James (2008) using data As concerns taxation, Hartman (1981) suggests that since the repatriation of earnings to the home country investor and not earnings themselves form the source of the tax liability, the foreign source income should affect investment differently depending on the required transfers of funds within the firm. Consequently, in order to maximise after tax profits, a firm should finance its foreign investment out of foreign earnings to the greatest extent possible. This further indicates that the required return on investment abroad increases at the point at which foreign investment just exhausts foreign earnings. Chapter 3. Research Methodology and Data. In this chapter, the methodology, as well as the data used to achieve the research aims and objectives would be discussed. Methodology is very important as it may affect the results of the study. It is therefore appropriate to discuss the methods properly since it will serve as a plan that would be referred to when completing each step in the latter part of the study. Data is very important especially the source from which it is obtained as some data sources tend to be unreliable while others are reliable. Relevant data must also be used in the study so as to ensure that the results are not biased. 3.1 Methodology The research method appropriate for this study is a quantitative research approach. Unlike most of the studies on FDI that have often used firm level data, this firm is going to use aggregate macroeconomic data to achieve its objective. The study aims at analysing how economic growth in Jordan is affected by inward foreign direct investment into the country. The appropriate way to achieve this is to establish a relationship between economic growth and inward foreign direct investment and then determine whether this relationship positive or negative and whether the relationship is significant. The significance will be done by carrying out t-tests on the coefficients that will be obtained by running the regressions. To achieve this, a regression model would be used to model the relationship between FDI and economic growth. To isolate the effects of other variables, and to improve the significance of the model, it is necessary to include other variables in the model. According to the neoclassical growth model, economic growth depends on a number of factors. These include domestic investments, population growth, which can be proxied by the labour force, foreign direct investment, development of the banking system, openness of the economy and education proxied by the expenditure on education and technology proxied by capital formation. Based on the above discussion, we can write the following growth model for Jordan. If we assume that economic growth is determined solely by FDI we can write the following growth model. (1) Where measures the annual growth in GDP per capita in percentage terms, represents a measure of the growth in per capita GDP not accounted for by fluctuations in the net inflow of FDI, is a parameter that measures the sensitivity of per capita GDP to changes in the net inflow of FDI, is the change in the net inflow of foreign direct investment to Jordan in year t, the subscripts t and j represent Jordan and time respectively, is a serially uncorrelated error term, which is assumed to have an expected value of zero. It measures the growth in per capita GDP that is neither accounted for by changes in FDI nor. The overall significance of the above model would be tested by calculating the R-square and testing its significance. The R-square is given by: (2) where RSS and TSS represent the regression sum of squares and total sum of squares respectively. If the R-square is below 50% this would indicate that changes in FDI to Jordan do not properly capture changes in per capita GDP indicating that model 1 is not a good model for the data. In that case we would have to include other macroeconomic variables into the model to improve on its overall significance. These variables include among others: interest rates, openness of the economy, domestic investments, population growth, education, technological development, etc. Taking this into consideration we can now write the following model: (3) where and remain as earlier defined, , , , , measure the sensitivity of movements in the per capita GDP growth to changes in banking sector development, government expenditure on goods and services, trade and net exports. The banking sector development is measured by using the domestic credit provided by the banking sector as a percentage of GDP. , , , and represent the change in FDI as a percentage of GDP for Jordan in year t, change in the banking sector development as a percentage of GDP for Jordan in year t, change in government expenditure as a percentage of GDP for Jordan in year t, change in trade as a percentage of GDP for Jordan in year t and change in net exports as a percentage of GDP for Jordan in year t, respectively. represents a serially uncorrelated random error term with zero expected value. Model 3 will also be estimated using ordinary least squares (OLS) regression and the significance of the coefficients will be tested using t-tests. The relationship between per capita GDP and economic FDI will also be explored. 3.1 Description of Data The data used in this study is obtained from the Economic and Social Development Service (ESDS) database, which reports world bank data on various economic growth indicators include GDP growth, per capita GDP growth, growth in exports, interest rates, consumer price index, inflation, expenditure on primary, secondary tertiary education, imports, exports, inward foreign direct investment, outward foreign direct investment, etc. Data on domestic credit provided by the banking sector as a percentage of GDP, exports of goods and services as a percentage of GDP, etc. The data is analysed using trend analysis and regression analysis. Trend analysis enables us to observe how the variables of interest have moved over the period under study. The period chosen for the study is 1976 to 2006. This spans over 30 years and enables us to observe how changes have taken place over the years. Trend analysis is however limited in that it cannot tell us which variables depend on which. We therefore turn to regression analysis, which enables us to study the relationship between variables and test for the significance of this relationship. We will therefore use regression analysis to determine how economic growth in Jordan is dependent on a number of growth determinants or indicators including banking sector development, foreign direct investment, population growth, government expenditure, gross capital formation, inflation, etc. Chapter 4. Data Presentation and Analysis 4.1 Trend Analysis. Figure 1: Jordan FDI net Inflows (% of GDP) and GDP per Capita Growth (Annual %) 1976-2006. The figure above shows the Jordan’s FDI net inflows as a percentage of GDP over the period 1976 to 2006. Figure also shows the annual percentage GDP per Capita growth over the period 1976-2006. One can observe a constant trend in the GDP FDI net inflows as a percentage of GDP over the 20 year period 1976 to 1996. As from 1996, the FDI net inflows as a percentage of GDP took an upward turn and has been on the rise since then with very slight fluctuations. The FDI rose from a low of approximately 2.0% in 2004 to approximately 20% in 2006. This indicates that Jordan has witnessed significant growth in the net inflow of FDI over the last 10 years. The annual GDP per Capi