Growth and Structural Changes in the Industrial Sector: An Econometric Analysis for the Case of Jordan (1968-2000)

This study aimed at demonstrating and analyzing the stages of industrial growth in Jordan as well as measuring the different sources of this growth. The study also aimed to analyze and measure the different sources of structural changes in the industrial sector using two econometric models, the first one measured the growth sources using the Two-Stage Least Squares method (2SLS), while the second measured the structural changes using the Ordinary Least Squares (OLS). The results of the study showed an existence of some structural disturbance in the Jordanian industry in terms of production, employment, geographic concentration and size to the benefit of some limited industrial activities. Also, the results exhibited that economic growth and population growth correlated with the increase in the ratio of industrial production to GDP and with the ratio of the industrial labor to the total labor in a way that reflects the imbalanced development pattern which Jordan adopted concentrating on the industrial sector. The study also showed that the growth in population, world prices, and GDP has a positive effect on the industrial growth, as opposed to the growth of the JD exchange rate against the USD. The effects of coefficients as estimated in the first model were (0.47), (0.17), (0.007) and (-0.24), consequently.