A Case Study of Foreign Direct Investment and Economic Growth Relationship in Turkey

Abstract

Foreign direct investment is believed to enhance long-term economic growth of a country through knowledge spillovers and technology transfers. This paper is an empirical attempt to check the effects of the foreign direct investment (FDI) on the economic growth (GDP) of Turkey. The paper uses time span from 1980 to 2017 for statistical analysis. Johansen co-integration and Granger causality tests were applied for empirical analysis. The results of the tests confirmed the presence of the co-integration between GDP and FDI as it was expected from the beginning. Furthermore, Granger causality test showed the unidirectional causality from FDI to GDP.

The role of the Foreign Direct Investment inflows on export in Azerbaijan: An ARDL approach

“…After the II World War, with the globalization processes, the developed countries started to search for alternative spots for investments to increase their profit due to the potential advantages of those hosting countries in transportation costs, cheap labor, abundant raw materials, and weak state control over regulations. In general, foreign investments are considered an essential source of advanced management, new technologies, and cash flow for a hosting country (Karimov & Belkania, 2018). Besides those positive sides, there are undeniably also negative sides of foreign investments in developing countries.…”