Özet:

The economic literature emphasised the need of the host countries to maintain a minimum level of financial market development for the foreign direct investment to foster economic growth. Yet, the applied research did not investigate the enhanced effect of FDI on economic performance in Jordan through financial sector development. The objective of this paper is to figure out the minimum level of financial market development in Jordan for the period 1980 – 2015 by applying the ARDL technique and Granger-Causality. The empirical estimation results disclosed a positive impact of the interactive variable, hence, supporting the complementary hypothesis of FDI and financial sector development on economic growth. The required threshold of financial development for the FDI inflows to exert positive effect on economic performance is 55.6%. However, this threshold may differ depending on financial development variable measurements. Keywords: Jordan, ARDL, Bound Testing, FDI, Financial Development, Economic Growth.

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