2
Today, Jordan has Free Trade Agreements (FTAs) with many countries. The most
recent country, with whom Jordan concluded negotiations, was Canada, on 25th
August 2008. The country has attempted to discard its high tariffs and has
implemented new policies to facilitate the ease of importing goods from Canada (Al
Faniq, 2009).
Furthermore, Jordan has also opened its market to the European Trade Union. Thus,
the Jordanian trade industry has to endure these tight conditions until its custom duties
are lifted, as was the case when the World Trade Organization (WTO) helped ease the
international trade restrictions (JGOI, http://www.national agenda.jo).
However, according to the country’s economic experts, Jordan’s industrial and
economic situation is still not strong enough. Jordan is still considered as a
developing country; there is a big difference for a country like Jordan to sign a free
trade treaty with Canada in term the Canadian products , that are known for their
quality , economy of pricing and their ability to compete in the global market, on the
contrary, the Jordanian products are less in both, quality and ability to compete (Al
Faniq, 2009).
Furthermore, such a treaty is more beneficial for Canada than it is for Jordan as the
latter is an advanced country that stands to gain by exporting its surplus to Jordan (Al
Faniq, 2009).
In the meantime, the Jordanian Ministry of Industry and Trade is enthusiastic about
the treaty with Canada. “Does the ministry expect Jordan to export mass quantities of
3
goods to Canada that are able to compete against Canadian and American products, as
well as products from Japan and the Far East?” (Al Faniq, 2009, p.13). Currently the
volume of European and Canadian imports to Jordan is considerably higher. This
means there is a significant imbalance as free trade benefits countries that are already
developed (Jordan Times, 2008).
Despite these agreements and new polices, Jordan, unfortunately, has not achieved a
successful trade balance with any partner (Al Rrai, 2008). Since Independence, Jordan
has imported far more than it has exported (World Fact Book,
https://www.cia.gov/library/publications/the-world-factbook/).
According to the Petra news agency report on 16
th
May2008, there is a growing
increase in trade deficit. The report of 10
th
June 2007 shows, Jordan's trade deficit
increased by 6.7% up to JD1594.2 million during the first quarter of 2007, compared
to JD1494.1 million during the same period in 2006. Furthermore, according to the
Department of Statistics Report 2006 (http://www.dos.gov.jo), Jordan’s imports had
increased by 5% during the year 2006.
Table 1-1 shows the Jordanian trade balance with the world. The department’s records
for the year 2008 indicated that the trade deficit increased by 22.3% as the deficit
amounted to USD 7,427.0 billion compared to USD 9,086.0 billion during 2007.
4
Table 1-1: Jordan Trade with the World, 2003-2008
WORLD
In USD
Billion
2003 2004 2005 2006 2007 2008
Import 4,595 8,176 10,478 11,561 13,127 15,607
Export 1,898 3,881 4,282 5,204 6,312 6,521
Balance (2,697)- (4,295)- (6,195)- (6,357)- (7,427)- (9,086)-
Source: (World Fact Book, https://www.cia.gov/library/publications/the-world-
factbook/).
The default in balance has attracted considerable attention from both government and
public sectors since it was announced in the general budget. The figures shown in
Table 1.1 are expected to worsen in 2009. Based on Jordanian Central Bank reports,
all the Jordanian trade balance components, except trade account (exports vs. imports)
are positive (Al Faniq, 2009). Thus, the problem is that the deficit is still outstanding.
In order to reduce it’s deficit, Jordan must reduce it’s reliance on imports, a trend that
has been increasing annually (Jordan Times, 2009). Al Faniq agrees and states that
“getting rid of trade deficit is not an impossible matter” (Al Faniq, 2009, p.13). In
fact, there are certain elements that have a negative impact on the budget but Toqan
states that “when we talk about reduction in imports we must also consider consumers
who have a decisive effect in this general budget and the increased imports” (Toqan,
2009, p.21). More specifically, availability of foreign products has increased
significantly and Jordanian consumers are now purchasing more of these products
than ever before.
5
This point has also been expressed by Al Faniq (2009) who states that consumers are
the main factor behind the budget deficit, given their tendency to purchase imported
products. Thus, Jordanian consumers must assume some responsibility for the trend.
Al Faniq (2008) also claimed that the erosion of moral and patriotic values might
account for consumers buying more foreign products than ever before. This point has
also been expressed by Shimp and Sharma (1987) who claim that purchasing
imported products is unpatriotic and could hurt the domestic economy and result in
job losses.
According to the Jordan Times, an English-language daily paper based in Amman, on
17
th
April 2007, the paper stated that many consumers prefer foreign brands to local
brands, as the former serves as a reflection of their new life styles.
On the other hand, Nejssen, Douglas, and Nobel (1999) claim that positive attitudes
towards foreign products results from the strength of the international brand and
increased exposure to global culture through travel and the media.
In fact, as the global economy expands and national borders dissolve, consumers are
more exposed to foreign goods that, subsequently, influence their purchase decisions
(D’Silva, Stephen, Modi, & Bulsara, 2008). The notion of a borderless world has
exposed the consumer to a universe of foreign brands surpassing any range previously
enjoyed.
6
Researches have shown that, in less developed countries (LDCs), preference towards
locally manufactured products is lower than towards imported products, as the former
is considered to be of inferior quality compared to the latter (Bailey & Pineres, 1997;
Ghadir, 1990; Hussein, 1997; Jin & Chansarkar, 2006; Yim, Garrma & Polonsky
2008).
On the contrary, Shimp and Sharma (1987) state that regardless of product attributes,
it is not fair to buy imported goods as this could have a negative impact on the
domestic economy, cause job losses and, according to the concept of consumer
ethnocentrism, be considered unpatriotic.
This could influence the general public’s attitude towards the home country in
comparison to the importing country - a concept which alludes to ethnocentrism
(Vida, Dmitrovic & Obadia, 2008; Yagci, 2001).
Several studies have found consumer ethnocentrism to be an important factor that
could use as a barrier to purchase foreign products and help the domestic economy.
Terry, Hogg & White (2000) agrees, and claim that governments can use the CET
construct to support their nation’s economy.
This sentiment has also been expressed by Suh and Kwon (2002), andTerry, Hogg
and White (2000) who state that ethnocentrism increases rejection of foreign products
and increases purchase intentions towards domestic products.
7
In fact, in an academic context, Hamin and Elliott (2006) found that most previous
studies investigating attitudes toward foreign products and consumer ethnocentrism
have been thoroughly examined. However, most of previous researches have been
conducted in more developed countries such as: Australia (Phau & Suntornnond,
2006); Canada (Ahmed, & d’Astous, 1994); UK (Davidson, Monika, & John, 2003);
Germany (Netemeyer, Durvasula & Lichtenstein, 1991); USA (Knight, 1999; Kim &
Pysarchik, 2000; Russell & Russell, 2006); Sweden and Japan (Hult & Keillor 1999).
Previous researcher indicates the growing need to examine this phenomenon from the
perspective of a less developed country, given the lack of pertinent research. In fact,
these authors have asked the question, “Do the preferences and choices of consumers
from less developed countries towards local and foreign products differ from
consumers in developed countries?” (Hamin & Elliot, 2006, p.81).
Nejssen et al. (1999) agrees and states there is a need to examine purchase behavior of
foreign products in developing countries as previous studies were conducted in
developed countries where a large and diverse range of domestic brands exist.
Furthermore, not only is there a shortage of data on purchase behavior in developing
countries but theories predicting consumer behavior have also been created mainly in
developed countries such as United Stated (Bagozzi, 1981; Malhotra & McCort,
2001; Terry, 2000), and not thoroughly tested in less developed countries (Hammin &
Elliot, 2006; Malhotra & McCort, 2001).
8
The Theory of Reasoned Action (TRA) is one of the well-known theories relating to
purchase behavior, conceptualized in the USA (Azjen and Faizbein, 1975). Many
scholars feel that TRA must be defined as a concept which is expressed quantitatively,
and also takes into account the varying thought processes across different cultures
(Malhotra & McCort, 2001). Some scholars such as Bang, Ellinger, Hadimarcou, and
Traichal. (2000); Bosnjak and Tuten (2001) and Tuten and Urban (1999), indicate
TRA theory has Western cultural biases.
Therefore, the problem statement for this study is outlined in the subsequent section.
1.3 PROBLEM STATEMENT
This study identifies five problems statement based on issues discussed above:
1- According to the Jordan Times (2008), the level of consumer ethnocentrism
among Jordanians is not known, given that more positive attitude toward foreign
products than ever (Ghadir, 1990). This has impacted Jordan’s trade balance
negatively. Moreover, the situation nevertheless has been found to be inconsistent
with the companies dealing with domestic goods in Jordan.
2- Very few studies that have examined the factors influencing the purchase of
foreign products in less developed countries (LDCs) such as Jordan. Indeed, this
concept has not been examined previously in Jordan. This has also been expressed by
Hussein (1997) who states there is limited empirical research on predictors of
consumer purchase behavior towards foreign products in Jordan.
9
Nijssen et al. (1999) have questioned the validity of applying the findings from large
countries to smaller countries where their homegrown brands are not as widely
available to their local consumers.
In fact, there have been many studies on purchase behavior of foreign products but the
majorities have been done in more developed countries (MDCs). This includes
Czechoslovakia (Orth & Firbasove, 2002); France (Javalgi, Khare & Gross, 2005);
Poland (Hui & Zhou, 2003); Turkey (Kaynak & Kara, 2000); the United States and
Spain (Luque-Martinez, Ibanez-Zapata, & Barrio-Garcia, 2000).
3- Previous studies only focused on a single construct such as consumer
ethnocentric attitudes or country of origin (COO). Furthermore, research of purchase
behavior in relation to foreign products has not adopted a holistic approach.
Bhaskaran and Sukumaran (2007) indictae that more integrated and theoretical
approach is urgently required for predicting consumer purchasing behavior more than
focuseing on the evaluation of products.
This indicates that these studies ignored the theory of consumer sociological behavior
and have only focused on product lineament, “examining consumer attitudes towards
foreign or imported goods has typically focused on the impact of a single construct
such as consumer ethnocentric attitudes or COO cues” (Nijssen et al., 1999, p.624).
Hamin and Elliott (2006) also agree, claiming there is a lack of research that
integrates consumer ethnocentrism construct with purchasing behavior, within a
theory such as TRA.
10
Most previous studies selected several domestic and foreign products, and made a
comparison based on: country of origin "COO" (Al Sulaiti & Baker, 1998; Hoffmann,
2000; Lin & Chen, 2006; Nagashima, 1970; Schooler, 1965) image of the home
country (Benny, 2008); multiple cues such as COO, brand, and consumer
ethnocentrism (Kinra, 2006); country of design, price, and brand image (Essoussi &
Merunka, 2007).
However previous studies indicated that regardless of the positive product attributes
(good price, high quality, & warranty); consumer ethnocentrism is still a barrier when
it comes to purchasing foreign products (Shimp & Sharma, 1987).
4- Most theories relating to purchase behavior have been created in developed
countries such as the USA. One of the well-known theories is the Theory of Reasoned
Action (TRA), established by Ajzen and Fishbein in 1980 in USA. The TRA theory is
considered to be very useful when predicting behavior (Sheppard, Hartwick, &
Warshaw, 1988), but is not thoroughly tested in less developed countries or even in
non-western cultures such as Jordan (Malhotra & McCort, 2001).
It is clear that great care needs to be taken when extending the findings of studies
conducted in developed countries like the USA, to countries such as Jordan. The
research findings from more developed countries are not necessarily applicable to
organizations in less developed countries – LDC (for discussion on LDC, refer to
p.22). In fact, according to Ticehurst and Veal (2000), culture can influence research
outcomes.
Ricevi informazioni sui nostri servizi, sulle offerte e non perdere news e consigli su università e lavoro.
