Purpose – The purpose of this paper is to analyze the impact of inward foreign direct investment (FDI) and international trade on economic growth in Turkey for the post-liberalization period (1980-2010). Design/methodology/approach – The paper employs the vector auto-regression model with four variables: real GDP growth, real inward FDI, the real import volume index and the real export volume index. Findings – Empirical results suggest a relationship between economic growth, inward FDI and exports. Practical implications – The results derived in this paper shed light on the relationship between FDI and international trade on economic growth for Turkey, which has been applying an export-led growth strategy since 1980, and has been implementing many regulations to attract foreign capital. It is evident that although Turkey's efforts and the importance of this issue, new policies and stabilization regulations must be established for the Turkish economy. Originality/value – This study contributes to the literature in at least two aspects. First, a comparative analysis of Turkey's inward and outward FDI with respect to different country groups was analyzed. Second, apart from other studies, the effect of inward FDI and international trade on Turkey's economic growth was tested utilizing an econometric method from 1980 to 2010, which is a relatively long time period for Turkey.

The economic and political changes witnessed in various aspects across the world have led to the questioning of the country classification systems provided by international organizations, such as World Bank, Organisation for Economic Cooperation and Development and United Nations, and brought along new country groupings. In 2001, the chief economist of Goldman Sachs, Jim O'Neill researched the progress of macroeconomic indicators of several countries and concluded that some developing countries have similar economic indicators. He classified this group of countries as BRIC (Brazil, Russia, India and China). This classification produced the view that different country classification systems other than the classifications that constitute prominent international organizations, such as World Bank, Organisation for Economic Cooperation and Development and United Nations, can be acceptable in the literature. One of these groupings is CIVETS. Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa, which are included in the CIVETS grouping, were identified as so by Michael Geoghegan, who was the CEO of HSBC, in 2010. Geoghegan argued that these countries are similar in many ways, including the demographic structure. In this context, the aim of this study is to question whether CIVETS countries are similar in terms of macro indicators (especially macroeconomic indicators). CIVETS countries have a homogenous appearance considering the average age weight and population growth rate. In other words, CIVETS countries are thought to have a homogeneous outlook within the framework of their diverse dynamic structures. From this point of view, it can be said that the CIVETS group does not optimally benefit from their manpower, which is the potential source of economic growth.

The increased commercial protection of countries as a result of the Great Depression caused the effects of the global crisis to deepen and last longer. Many countries took short-term steps to minimize the negative social impacts of the crisis by implementing protectionism. However, the crisis was gradually deepened and exerted long-term impacts on macroeconomic variables. The international platform made several attempts to reduce protectionism. However, following the global economic crisis in 2007-2009, the barriers to international trade have increased in many countries, especially in the USA. In many countries, inward-looking protectionist economic policies have been increasingly preferred. Thus, the global impact of countries' adoption of protectionism in their international trade policies has begun to be discussed in terms of the pros and cons for partners. This study analyzes the pros and cons of international trade protectionism on the basis of the impact of trade on macroeconomic variables. The results show that not only protectionism but also free trade produces both winners and losers.

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